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Questions

  1. Why would they do this, I can't imagine what type of liquidty issues they may have,
  2. I know stocks like Berkshire (where stocks are kept high to dissuade short selling, excessive voltailty and what not) But this stock is nearly 5x as large as they are, what type of people are doing these trades? (Company owners? Fund managers? are they even disclosed?)

the stock in question is an Israel Oil Company Paz Oil Company Ltd PER SHARE PRICE OF $56,000 (https://www.google.com/finance?q=pzol&ei=9GfJU7iIBcquqAH4jYHACw)

  • That's actually 56000NIS which is about $16K, but that doesn't change your question much. – littleadv Jul 18 '14 at 21:38
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Simple answer is because the stocks don't split. Most stocks would have a similar high price per share if they didn't split occasionally.

Why don't they split?
A better way to ask this is probably, why DO most stocks split? The standard answer is that it gives the appearance that stocks are "cheap" again and encourages investors to buy them. Some people, Warren Buffett (of Berkshire Hathaway) don't want any part of these shenanigans and refuse to split their stocks. Buffett also has commented that he thinks splitting a stock also adds unnecessary volatility.

  • Bottom line - it is relatively closely held companies (even if public) and the majority owners are not interested in retail investors. – littleadv Jul 18 '14 at 21:39
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    Splitting also makes it possible for smaller investors to buy into and manage their participatin in that stock. that stock. Mutual funds can track fractional shares. Most other mechanisms don't. Expensive shares force to you make decisions in chunk sizes that may not be a good match for your plans. If I own 4 shares of a $50 stock, I can theoretically pull $50 from my account. If I own 2 shares of a $100 stock, I have to pull $100 or nothing. – keshlam Feb 8 '16 at 21:07
  • Berkshire Hathaway has a high stock price to keep out small investors. A single share costs about 4 times the average US income. – Matthew Whited Oct 24 '16 at 20:26

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