Lepidico for Newbies!, page-14

very very few people understand this... it actually makes 0 difference to the shareholder... ill try to explain

if you own 10 shares out of a total of 1,000 you own 1% of the company

if they did a 10:1 consolidation

you would then own 1 share out of 100 - which is exactly 1% of the company

if the company makes $100 million profit and pays that all in dividends what would you get in the first and 2nd example? yep exactly the same 1% is always 1% being $1 million of the $100 million of the total dividends in this example

like i said most people dont understand this and then sell after a consolidation because they think shares have been "stolen" from them or whatever other words / thoughts they come up with

just like bonus shares - they think they have "won" new shares for free - there is no effective difference in the % of share ownership - which is the only thing that matters... except of course the psychology... and thats where it becomes interesting....