The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Is Direxion's Reverse Split Decision a Good Move? Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, June 22, 2010

Is Direxion's Reverse Split Decision a Good Move?

by: Sean Hanna, Editor in Chief

When asked how many slices he wanted from his pizza, Yogi Berra once said that the slicer had "better make it four, because I can't eat eight." Share splits remain as confusing a topic for investors as ever.

Chuck Jaffe spins an article out of mutual fund stock splits and reverse stock splits in Tuesday's WSJ Fund Track column, pointing out that the do matter at least a little. The spark for the split take was Direxion's decision to run one-to-five reverse splits for four of its leveraged ETFs: Direxion Daily Energy Bear 3x Shares (ERY), Daily Real Estate Bear 3x Shares (DRV), Daily Small Cap Bear 3x Shares (TZA) and Daily Technology Bear 3x Shares (TYP).

Those seeking a refresher course on stock splits can get a quick brief from the article.

Why are ETF share splits more meaningful than old-fashioned stock splits? Well, in the case of leveraged ETFs, Jaffe argues that low NAVs lead to a greater chance for discounts and premiums to develop. He also says that "low share prices also allow the smallest fast-money traders to get in and out with very little skin in the game." 

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2024: Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use