If a pie is worth $10 and you cut it into three slices, are those three slices now worth significantly more than the original pie? The obvious logical answer is no, but when you’re talking about Wall Street and stock splits, slicing up shares of stocks can add a lot of value.
That much was made clear on Tuesday when shares of online broker Ameritrade (Nasdaq: AMTD) climbed 14 percent, rising 5-1/16 after 41-1/4. Tuesday was the first day of trading for Ameritrade since it split its stock 3-for-1 after the market closed on Friday.
Competing brokers had mixed results on Tuesday. E*Trade (Nasdaq: EGRP) gained 1-1/8 to 41-1/16, while National Discount Brokers (Nasdaq: NDB) fell 3-15/16 to 55-7/8. For one day at least, cutting Ameritrade’s stock into three pieces made it more appetizing than its competitors. So much for logic.