Veriton Investment

After 16,831% Jump, Booking Splits One of the Priciest US Stocks

(Bloomberg) -- One of the highest price-tag stocks in the US equity market is about to get a deep-discount markdown.

Booking Holdings Inc., whose shares closed at $4,269.99 a piece on Wednesday, said its board of directors approved a stock split that will give investors 25 shares for each one they own — a step that high-flying companies often take to make sure their stock doesn’t look too costly to investors.

It did the opposite in 2003, when it was known as Priceline.com and had been dragged down by the collapse of the dot-com bubble. It approved a 1-for-6 reverse stock split to give its share price a little optical boost.

Since then, though, the growth of its online travel business has driven a very real rally that pushed up its stock about 16,831%.

That left Booking with a four-figure share price, a rarity on Wall Street. The Class A stock of Berkshire Hathaway Inc. are one famously high-priced exception: They closed at $747,960.00, reflecting former Chief Executive Warren Buffett’s dismissive stance toward stock splits.

The split should bring Booking down to about $165 a share and will take effect on April 2. It was announced in conjunction with the company’s latest quarterly results, which showed its bookings rose 16% from a year earlier to $43 billion, topping analyst estimates.

Shares of the Norwalk, Connecticut-based company fell about 0.6% in extended trading. They have fallen 20% this year through Wednesday’s close.