Stationery and Office Supplies’ board just approved its first-ever stock split. But why? 

Stationery and Office Supplies, SOS, is a local manufacturing and distribution company for, take a wild guess… stationery and office supplies. 

A few years ago, the company acquired the SEEK book brand, which has been a major win. For my viewers outside of Jamaica, the SEEK brand of books is iconic in Jamaica. The list of National Heroes, the anthem, and the multiplication tables on the back come in handy many times. 

And financially, the company has been doing really well. More than well, actually.

SOS had its best year ever last year, reporting record revenue of $1.7 billion. Their net profit doubled to $256 million. The momentum carried over into their first quarter when the company’s revenue increased by 22% to $519 million. 

They also set a new record in March with $207 million in sales for the month. 

So with all this good news, the board at SOS wants to pump more liquidity into the stock. 

See, for at least the last year, SOS’s stock has been trading at volumes below 100,000 so there hasn’t been much movement on the stock price.

So the board has decided that a stock split might help this. A stock split is just as it sounds; splitting one share into multiple shares. In this case, SOS’s board approved a nine-to-one split which means one share will be split into nine. It will also split the share price nine ways, making the stock cheaper. So, it doesn’t affect the value of the stock. Think about it this way. If you have a $5000 bill and five $1000 bills, which is more? That’s right, they’re both the same. The only difference is with five $1000 bills you have more freedom to do multiple things at once. 

It’s the same with a stock split, investors will be able to trade more because they have more shares and the price is lower.

SOS’s stock closed on Monday, June 26 at $26.35 – so a nine-way split would bring the price down to the $3 range.

SOS shareholders will vote on whether to approve the stock split at the company’s extraordinary general meeting on July 25.

The proposed stock split comes at a time when SOS is on a massive expansion plan.

The company is reportedly pumping some $60 million to build out another storage warehouse on its Beechwood Avenue property. Plus they’re upgrading the delivery fleet by adding three more units.

And the company has signed some local and regional partnerships to expand its product lines.

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