Important Note:
If you wish to compare the current priceline.com price with the historical prices in this book, you must now divide the current price by 6 in order to get the comparable worth.
On Monday, June 16, 2003, priceline.com took two actions:
- Changed its ticker symbol from PCLN to PCLND
- Declared a reverse 1-for-6 stock split. Investors received one share of new stock for six shares of the old stock.
Why a Stock Split?
For a long time, priceline.com was yo-yoing around $4 to $5 a share, where it should have been all along, down from its outlandish 1999 high of $165. With a 1-to-6 reverse stock split, the price is suddenly in the $24-$30 range, yet another cunning stunt in the priceline.com's manic scramble for respectability. Motley Fool's Rick Aristotle Munarriz (TMF Edible) said that this enabled it to "try to break out of the penny stock nadir."
Priceline.com's CEO explained that the reverse split, "enhances our position by expanding investor interest, reducing transaction costs for trading our stock, making our results more comparable to peer companies with far fewer outstanding shares, and allowing Priceline.com's earnings per share on a post-split basis to more precisely reflect the company's operating results."
"See, Priceline's charms aren't real right now; it's wearing falsies," Munarriz wrote. "One has to wonder why the 'Name Your Own Price' travel specialist resorted to this kind of sleight-of-hand chicanery. Online travel is rocking and the company really was just a few ticks away from getting over the $5 hump. While reverse splits are often makeshift paper strings to hold off the anvils of delisting, Priceline wasn't in that boat at all."
What sort of boat are we talking about?
You are invited on an extraordinary voyage.
And please keep in mind the immortal words of Bette Davis in All About Eve, "Fasten your seat belts. It's going to be a bumpy ride."