Visa Announces 4:1 Stock Split

MAJOR STOCK SPLIT ANNOUNCEMENT: Visa (Ticker Symbol: V) announced today that it is doing a 4:1 stock split, effective March 18th 2015. This announcement came amidst a better than expected 1st quarter earnings information release.

The stock was up on this announcement and closed for the day (January 29th) at $248. If the price was to stay the same, which we know from experience that it will not, the stock at $248 would then trade at $62 per share. This price change will have an effect on the DJIA 30 stocks, as it is now the most expensive stock on this index. These stocks are weighted and adjustments will now have to be made. There will also be changes on the S & P Index as this index uses a different formula, measuring market capitalization.

The news announcement today showed earnings better than expected—which is one component of stocks going through stock splits. Visa said that the lower price of gasoline had a positive effect on their earnings.

We have isolated five times to trade options on companies going through stock splits. These strategies use options, and Writing Covered Calls is adjunct to that (not one of the five ways to cash flow stock splits). We’ll write more on this if there is interest. Comment and state so at wadecookblog.com.

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