The stock of a company is equal to the structure of a home with bricks. To call it a home / company, it needs to have a follow structure as a sample.
The objective of this theory is to express that the company stocks should not be over valued by splitting the number of stocks to lower numbers, keep the value reasonable with more number of stocks which creates opportunities to the company itself in future.
In most of the companies the stock is based upon the Earning Per Share value / Price Earning Ratio’s and so on.
The major objective of this sample to bring the structure of a company in such a way that the companies should not overvalued its stock and it’s better to be in a reasonable price. Why it’s vital to split the company stocks at a reasonable measures, to explain this I am bring the theory of “BRICKS & COMPANY STOCKS”.
To make a home we have to build all necessary structure as below, in the same way to build a stock of the company we have to prepare a necessary structure at a reasonable way.
Once we have our home ready and it’s a time to prepare an entrance for the home.
And so the stock of a company open’s the door with its necessary entrance for the investor to enter into the company. I.e. The gate is known as a space to enter or the amount of space taken by the investor to enter into the home / company.
It’s really vital for any company to split the stocks at a reasonable multiple factors that should be easy for a company to open the doors as the space they required in the form of investment.
Imagine instead of making the wall with so many bricks if I prepare the wall of only 2 bricks, it’s very risky to fail, which opens a huge gap / huge space for anybody enter into the home. Which says that its quiet safe to keep or split the stocks in a reasonable numbers same like number of bricks to make easy for yourself to let the air / entrance reasonable.
The bigger picture of this theory is that “ The smaller the wall with more number of bricks, safer the wall to create the required space of door / window / investor to come in” rather than making the money with huge value of share with low number of shares i.e same in the form of 2 bricks wall instead of more bricks.
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