Which is worth more?

Answer: They are equal in value.

Which can earn you more money?

Answer: There is absolutely no difference in how fast or high the underlying stock will move. They will move the same on a percentage basis. If a company offered both $5 and 1 cent common stock certificates and one doubled in price, the other would also double in price. If the 1 cent certificate moved up by a factor of 100, the $5 stock would move up by a factor of 100. In either case the investor’s $ gain would be the same.

Which cerificate would you want to own?

Answers:

• Most young children would say they want the 500 pennies, thinking that 500 is more than 5.
• Experienced investors would say it doesn’t matter.
• Many fund managers would say that by charter they can only buy the certificates priced at $5 or more; thus the market for >$5 stocks has a greater number of potential buyers. That’s why it is often a good idea for a company to do a Reverse Split to get the price into the buying range of institutions. R/S has a favorable outcome if the company has solid fundamentals and performance - PTSC does. You don’t get a favorable result by doing a R/S if your company is failing – PTSC is not.

So why do companies do stock splits? (forget Reverse Splits for a minute)

Answer: This is an interesting question and financial analysts seem to be in agreement. Their conclusion: Stock splits are primarily a U.S. company thing – tradition. The companies that do splits are keeping their stock price in a given arbitrary range, which has no correlation to stock price moves. Hmmm, interesting - stock splits cost money to execute and have no return. If they have no value why do stock holders want their stocks to split? I’m guessing that their reason is the same as stated above, “... they want the 500 pennies, thinking that 500 is more than 5” – so U.S. companies do stock splits.