Facebook To Split Stock For The Third Time: And the Rich Get Richer
If you are one of the lucky people that own any private stock in Facebook, you will be pleased to know that you will own a lot more stock soon. The social networking giant Facebook announced Friday that it is going to project a 5 to 1 stock split. This is the third split in the history of the company after the company had a 4to1 split in 2006 and in 2007.
According to CNN.com, Facebook will likely agree the split in 2012. Facebook currently employs 1700 people and most have a stock option to own stock within the company. It is reported that until Facebook goes public,you can only buy stock through SecondMarket. SecondMarket allows accredited investors to buy stock from privately owned companies.
A stock split does not increase the equity for the stockholder. For example if you own one share at $50, after the split you will own 10 shares at five dollars apiece. This allows a company to liquefy assets and sell stock more cheaply.
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