Intercontinental Exchange (ICE) Stock To Split For 5-for-1
Zacks Investment Research | Oct 12, 2016 10:31PM ET
Intercontinental Exchange Inc. (NYSE:ICE) recently announced its decision to go for a five-for-one stock split of common stock in the form of a stock dividend. Shareholders on record as of Oct 27, 2016 will get four additional shares for each share held. The new shares will be payable on Nov 3, 2016. The company’s common stock is expected to begin trading on a split-adjusted basis from Nov 4, 2016. Shares gained about 0.75% in the trading session on Oct 12, to finally close at $267.33.
The shares of Intercontinental Exchange have been consistently trading above $200 since Nov 7, 2013. Year-to-date, the stock has returned 4.32%. Notably, the share price will be slashed by one-fifth post spilt, thereby making it an attractive pick for potential investors.
Stock split increases the number of outstanding shares of a company without changing the company’s market capitalization. A higher number of shares outstanding translates to lower stock price, thus making it affordable for shareholders. Strong fundamentals coupled with favorable industry trends makes shares dearer as they trade at a premium. Following a stock split, value of the same shares fall, in turn, increasing a stock's liquidity.
Intercontinental Exchange continues to drive organic growth with 11 exchanges and seven clearing houses, covering nine asset classes. It is the first exchange to offer clearing in the over-the-counter energy and credit markets and accounts for more than one-third of the global cash trading. Intercontinental Exchange has demonstrated immense growth potential in its futures and OTC markets. The acquisition of NYSE in Nov 2013 solidified Intercontinental Exchange’s position as a premier stock trading platform as it became the second-largest global exchange group with over 60% accretion in market capitalization. The securities exchange also witnessed organic growth on the back of a strong portfolio of future and options’ contracts. Since its IPO in Nov 2005, Intercontinental Exchange has grown its bottom line by 5x and share price by 10x.
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