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Technology Stocks : CMGI What is the latest news on this stock?
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To: james h. snyder who wrote (3086)12/20/1998 3:57:00 PM
From: Sowbug  Read Replies (1) of 19700
 
James, the rule on stock splits is nobody gets something for nothing, and nobody is penalized. So ignore the record date. Whenever you sell stock, you sell all the rights you have in that stock (including the right to receive the dividended stock from the split) to the buyer. Likewise when you buy. Because the rights travel along with the stock, whoever owns it on the distribution date gets the extra shares.

The only confusion might arise if you do trading right around the distribution date, and (a) you put in a limit or stop-loss order and your brokerage doesn't adjust it for the new stock price, meaning the order gets triggered prematurely, or (b) you sell 100 shares, for example, and your brokerage screws up and thinks you mean 100 post-split shares, leaving you after the execution with 100 extra shares that you had intended to sell. Both those cases would be your brokerage's error (in my opinion).
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