Hi -- I would like to know how to calculate the value of a stock split. I bought
shares in the stock NVDA when it was still trading in fractions. I bought:

12 shares @ 71 & 3/16
16 shares @ 57 & 5/32
14 shares @ 66 & 21/32
90 shares @ 54 & 9/16

Then, in September 2001, the company declared a 2 for 1 stock split. I
received a total of 132 extra shares as a result. So my question is
... how do I now determine how much money I have made off the stock?
The stock is no longer trading in fractions ... Can you tell me how
much my stock is worth now and how much I paid for it? How can I
calculate this on my own in the future?

Thanks!

Hello.

First of all, let's convert those purchase prices into decimals.  You
can convert the fraction by simply dividing the numerator by the
denominator with a calculator.
For example, 3 divided by 16 is 0.1875
Google has a nice calculator function:
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&client=googlet&q=3+divided+by+16&btnG=Search

Thus, the purchase prices were as follows:

71.1875
57.15625
66.65625
54.5625

To determine the purchase price of each transaction, we multiply the
number of shares by the price:

12 x 71.1875 = 854.25
16 x 57.15625 = 914.50
14 x 66.65625 = 933.19
90 x 54.5625 = 4910.63

We then add up the four purchases:
854.25 + 914.50 + 933.19 + 4910.63 = 7612.57

Now, you don't mention paying any commission to a stock broker when
you bought the stock.  If you did pay commission, you should add it
in.  For example, if you paid commissions of $30 per trade on the four
purchases, you'd add in 30 + 30 +  30 + 30 (i.e., a total of 120). 
Again, though, you don't mention commissions, so I don't know the
exact figure.

$7612.57 (plus commission) is your "basis."  That's how much you paid
for the stock.

As I type this, stock is trading right now at $26.18 (that may change
within the hour).
http://finance.yahoo.com/q?s=nvda

Your 264 shares are currently worth $6911.52.
( 264 x $26.18  = $6911.52).

You haven't made money on this stock. If you were to sell your all of
your shares today at $26.18, you would have a loss of approximately
$700 + commissions.

selling price - purchase price = profit/loss
(6911.52 - commission) - (7612.57 + comm.) = -701.05 - comm.

--------

If you this helps you understand how to calculate this. If anything is
unclear or you have any questions, please use the "request
clarification" feature to let me know.  Thanks.

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Clarification of Answer by juggler-ga on 07 Apr 2004 12:44 PDT

Sorry for that typo at the end.  It should have been:

"I hope this helps you understand how to calculate this."

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Request for Answer Clarification by kappyben-ga on 07 Apr 2004 13:28 PDT

OK, I think I see. So when a stock splits, the company just gives the
investor more shares ... The actual price or valuation of the stock
does not change ... correct?

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Clarification of Answer by juggler-ga on 07 Apr 2004 13:36 PDT

Right.

You bought 132 shares, but now you have 264 due to the split.  That
doesn't affect your total basis or anything.

Before the split, $7612.57 (plus commission) was your "basis."  It still is.

Your "per share basis" changed due to the split
$7612.57 divided by 132 = $57.67
$7612.57 divided by 264 = $28.835

However, this doesn't have any effect on profitability, etc., because
when the stock split 2-for-1, the price was cut in half the same day.

Let me know if this is clear.

Juggler gave me a thorough, detailed, accurate and helpful answer.
Highly recommended!

"So when a stock splits, the company just gives the
investor more shares ... The actual price or valuation of the stock
does not change ... correct?"
No, this is not correct.  When the stock splits, the price of the
stock splits in exactly the opposite direction. So, a stock split by
itself does not change the value of your holdings. For example, when a
stock splits 2 for 1 (you get 2 shares for every 1 you had), the price
splits 1/2 so each share is worth half as much as it was before the
split.

research_help:
I think what kappyben meant is that no value is created by the stock
split. In real terms, it doesn't affect cost, basis, profit, etc. 
He's correct.

kappyben:
Thank you for the tip.
-juggler

Juggler,
Just to make sure you understand, the stock split DOES change the
basis price. I think the IRS would be interested to know if someone
reported the before split price as their basis in computing capital
gains. Perhaps you may want to rethink your answer so as not to
mislead the customer.

research_help:

I wrote:

Before the split, $7612.57 (plus commission) was your "basis."  It still is.

Your "per share basis" changed due to the split
$7612.57 divided by 132 = $57.67
$7612.57 divided by 264 = $28.835

-------

What is misleading about this?!

--------

In my comment to you, I wrote, "In real terms, it doesn't affect cost,
basis, profit, etc."

The key phrase here is "real terms."  Of course, the per share basis
changed (cut by 50%).  However, I simply meant that because the number
of shares doubled, the net effect on profitability is zero.  The
comment had nothing to do with advice on how to fill in tax forms.

lizzardnub:
I don't know what question you guys are reading, but whoever said that
the price stayed the same?

Again, read my answer. I wrote:

Your "per share basis" changed due to the split
$7612.57 divided by 132 = $57.67
$7612.57 divided by 264 = $28.835