Stock Split

Recently Airtel share price have slashed down to half. In a confusion I started searching the newspaper to know the reason behind this, that too this happened when it is financially strong and leaders in the telecom industry. From Economic Times I came to know Airtel have undergone stock split after all of its share holders interest. What is stock split? Why the company go for stock split? Is that advantage or disadvantage for an investor? These are the questions for which I was searching answers.

Stock split is basically an action taken by a corporate to increase the number of shares thereby decreasing the share price with out affecting the companies capital. In this (Airtel) case, Airtel had conducted a postal ballot across all the share holders regarding 'vote against the stock split' or 'vote for the stock split'. Majority voted 'FOR' the stock split and the company implemented the same.

Basically the companies go for stock split when the price of the stock gets higher and higher and because of this some small investors keep away from buying this stock. So splitting the stocks brings the prices down and make it attractive. Also it gives a feel to the existing share holder that their shares are suddenly doubled and ofcourse price cut down.

Lets take an example. Say a compnay have 1,000 share at price Rs.100. Now the capital of that company comes to (1,000 x 100 = Rs.1,00,000). Now after stock split in the ration 2:1(two share for every single share) the number of shares doubles to 2000 (1000 x 2) and the share price drive down to Rs. 50 (100/(2/1) = 50). If we calculate the comapany's capital after the split (2,000 x 50) it comes to Rs.1,00,000, which is same before the split. So the capital of the company is not at all changed.

Sometime companies go for reverse stock split. ie 1:2(one share for every 2 share). They basically go for reverse stock split to increase the value of their share to gain respect in the market. Say a company have 1,000 share at price Rs.50. Now the capital of that company comes to (1,000 x 50 = Rs.50,000). Now after reverse stock split in the ration 1:2 the number of shares is halfed to 500 and the share price drive up to Rs.100 (50/(1/2) = 100), So 500 x 100 = 50,000 is the companies capital after reverse stock split.

ATM Freedom

Atlast ATM freedom will happen from April 2009 onwards.

How Can I

I had a debate among my friends on Stock Market. I started to defend on their misconception on the market. When I was about to tell about a person who became millionaire through this, I totally forgot his name and unable to recollect. I was struck there and tried a lot to recall his name but in vain. Yesterday in TOI newspaper I was happen to see his name. That time I regret, how can I forget this legend, the world famous investor WARREN BUFFET.

True Valentines Day

Amidst the Valentine's day hype, what does it really mean? Solution found in Arun's Blog. :-)

ECR Drive on New Year Day

All of sudden we (LAN, Ram, Kannan and Me) planned for a ride on East Coast Road (ECR) on account of New Year. Driving at night won’t be a good idea so we planned at morning 7AM to kick off the drive. The sad part is I woke up at 7AM only, because I retired late the day before. Ram was punctual, at 7 he came to my room and he may be upset after seeing me, as I was late. Soon I geared up with my activities and got ready. Meantime Ram started to disturb Kannan’s dream and Kannan started getting ready. Lan, couldn’t make that day with us due to his illness, so we forgave him. At 8AM we started our drive and after completing our breakfast in Hotel Insuvai, Royal Enfield and Discover joined the ECR parade.

The road was unusual, full of traffic because of New Year. Bikes were dominating the road that day. We made ourselves to be more cautious on our drive. We maintained 40km speed and drove by chatting and taking photographs all the way. We stopped our journey in a park and took rest over there and had a good time in that park. Crocodile bank and Muttukaadu Lake had population scarcity in the early hours. The weather was promising and was favourable to our drive. Even at 10 it was cool and the beach nearby us added more beauty to our ride and it made even more pleasant drive.

We decided to change our drive from slow pace to fast pace as the road was free, and started cruising the machine. Oh my God, soon I realise, the speedometer needle crossed 100 and I reduced the speed. We were crossing Mahaballipuram, which was crowded.

Ram asked, wanna try Royal Enfield. With little fear, I agreed :-). I sat on it and felt the glory of Royal Enfield. Before drive, Ram gave me the instructions and tips, and I was keenly listening to him. After that I kick started by keeping the Amp needle in 90 degrees and after few failures, Bullet got started in its typical sound. The gear system is totally different and recollected Ram instructions and applied first gear. It was a great success and the mammoth started moving. I changed the Gear from 1 to 2 to 3 to 4 and gradually increased the speed and felt like sailing in a ship. That much pleasure esteem and pride while driving it and started thinking, the bike to be owned :-)

We almost travelled 50km and decided to return back. On the way we visited Tiger cave, a cool place. Had fun over there and were chatting by having ilaneer, velri and ezhantha pazham. We left that place and started travelling toward point 0. On the way we happened to see few terrific accidents and it again remained us to maintain our speed to minimal and reached safely.

Kannan took control on the camera through out our journey but no usefull photographs :-)

1st Anniversary

Oops, it has been a year I started blogging.