Coca-Cola Recommends First Stock Split Since 1996

by Candice Choi
Wednesday Apr 25, 2012
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NEW YORK (AP) - The Coca-Cola Co. is seeking its first stock split in 16 years.

The world’s biggest beverage maker said Wednesday the 2-for-1 split is in line with its plan to double revenue over this decade. The Atlanta-based company’s stock began trading in 1919. Since then, the stock has been split only 10 other times.

Companies split stocks when they think their share price has gotten too expensive or if the stock is trading too far above similar companies’ stock.

If approved, Coke’s split would increase the number of its shares to 11.2 billion from 5.6 billion. Shareholders would receive one additional share of stock for each share held in early August.

The move is subject to approval by shareowners on July 10.

Last week, Coca-Cola reported another first quarter profit that beat Wall Street expectations. The strong performance came as the company sold more of its drinks worldwide, particularly in emerging markets like China and India.

A key aspect of Coca-Cola’s success in recent years has been its ability to deftly manage rising commodity costs. To avoid scaring off price-sensitive customers, Coke has instead focused on offering a variety of smaller drink sizes that have higher profit margins.

Those smaller sizes are often welcomed by health conscious consumers as well.

Shares of Coke added 47 cents to $74.59 in morning trading. The stock is up about 7 percent in the year to date.

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