Thursday, June 15, 2006

Abnormal Stock Splits

Yesterday I came across the stock of Archer-Daniels-Midland Co. (Symbol – ADM) on Yahoo! Finance. When I saw the split history of this stock, I was surprised and curious. So much so that I have to ask you readers out there who know a thing or two about the reasons behind the unique/unusual/abnormal split history of this stock.

The stock history goes something like this:

  • 3:2 on 03-June-1986
  • 3:2 on 05-December-1989
  • 21:20 on 17-August-1993
  • 3:2 on 06-December-1994
  • 21:20 on 15-August-1996
  • 21:20 on 14-August-1997
  • 21:20 on 20-August-1998
  • 105:100 on 19-August-1999
  • 105:100 on 24-August-2000
  • 105:100 on 30-August-2001

I can understand the 3:2 stock splits, but 21:20 and 105:100 surprises me. Why a company would split the stock this way? And why so often?

If you know any other peculiar split history of a stock, let me know by commenting on this post. Thanks.

3 comments:

Bill said...

The 21:20 (incidentally 105:100=21:20) split is most likely a scrip dividend being payed out, where instead of cash, shares are given as a dividend payment.

GaryP said...

Works out to a 5% dividend, right?

amit said...

What's the difference between a 21:20 split and a 105:100 split?

Does this mean anyone owning less than 100 shares will be cashed out?