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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: chaz who wrote (7223)9/29/1999 2:14:00 PM
From: Brian Sullivan   of 54805
 
No the authorized shares don't automatically increase with a spilt.
An IPO with 1,000,000 authorized shares and 200,000 shares out, would if it spilt 2 for 1 use 200,000 of the remaining 800,000 shares to pay the stock dividend. That is why you often see a 2 for 1 spilt state that it is payable as a stock dividend. The dividend is paid using some or all of the unused authorized shares.

After several stock splits several times a company often runs up against the authorized shares limit and then has to then spilt the share subject to shareholder approval to increase the authorized shares limit.
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