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Forum - Wall Street Pit (Direxion Daily Junior Gold Mine - JDST)    Stock Due Diligence for All

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From: halleluyah (Rep: 155) reply to tmorr55Date: 05/04/2017 14:01
Forum: Wall Street Pit - Msg #2673627 - List JDST msgs Thread #673925233 (Rec: 0)
Re: Why did they split this thing?.....the split was announced 2/28/2017 effective for 5/1/2017 ---

Direxion expected the share prices to necessitate the splits -

as Direxion explains:

Q: Why has Direxion Investments decided to reverse split ETFs?
A: Direxion believes it is in our shareholders’ best interest to conduct a reverse split in order to keep the ETF’s price in a convenient trading range.

For instance, Direxion expects the costs associated with trading these ETFs to decrease due to the split. The bid-ask spread is expected to decline as a percentage of the price paid per share. For instance, a penny spread on a $5 stock is 20 basis points1 (.2%), while a penny spread on a $50 stock is 2 basis points (.02%). Further, commissions charged by brokers who charge their clients on a per share basis will be lower as investors will need to buy or sell fewer shares to meet their investment goals.

Reply to tmorr55 - Msg #2673624 - 05/04/2017 13:46

Why did they split this thing? Usually they do that when a share price gets down to lower single digits. JDST was in the $12-$15 range of late,
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