William Shatner has for years been the face of Priceline.com on their TV commercials. His latest gig with the company had him playing Priceline Negotiator, a character that personified your ability to negotiate good travel prices on the website. Now its time for the Negotiator to negotiate a split of the companies stock which sits at a lofty $1,200+.
Stock Splitting Is Meaningless?
Most everyone knows that splitting a stock is purely cosmetic. It does nothing other than to create more shares at a lower price and many investors and pundits argue that it is a waste of time. But then why have Google and Apple both split their shares this year? Surely those two companies (and many others) believe there is a viable reason to do it.
Priceline’s stock, is now one of the most expensive stocks out there (on a pure dollar basis) and it only trades an average of about 250,000 shares per day. At such a high entry price, many smaller investors are kept away from buying because they can’t afford to put that much money into one stock. That or they like buying lots of 10, 50, or 100 and the $1,200 price point puts Priceline out of their reach.
Now Is The Time For A Priceline.com Stock Split
Since the middle of 2008 PCLN has been on fire and one of the best growth stocks out there. In October 2008 you could have picked up the stock at $52 if you bought at just the right time. $52 all the way up over $1,200 in just under 7 years is a grand slam by anyone’s calculation. But the stock seems to have stalled this year and needs something to give it a boost and get it back on investor’s radar.
Announcing a split would do two things: 1) give the stock some much needed free publicity and 2) make it more affordable to individual investors who are shut out now.
Just splitting the stock might not make a huge difference or any difference at all. However, it can’t hurt to get the price more in line with other stocks and not be one of the only stocks over $1,000. 2014 is the perfect time to do a split (or at least announce one) now that both Google and Apple have successfully split theirs and splitting has been in the news so much.
What kind of split should they do? I think a 10 to 1 split would bring the price down into the $120’s and be the right amount. People are very used to seeing stocks costing $50 to $200 and that is right in the middle of that range. A 10 to 1 Priceline stock split is just what is needed now to get investors and people on the sideline talking about the stock again.