Matt Koppenheffer and David Hanson discuss a bill that may go before Congress that will reverse how stock prices are reported.
Currently, stocks are priced using decimals, rather than fractions like the good old days. This has led to very small spreads for trading companies dealing with stocks. The claim is, if we revert to fractions, at least for small-cap firms, this would increase the profit potential for small-cap companies -- more Wall Street brokers would research and promote these small stocks. And by virtue of such promotion, more investors would buy them and the companies would be able to grow their businesses and hire more people rather than languish with thinly traded stock offerings that really don't add meaningful funds for the company to use. Such is the claim of those contemplating a new bill that might go before Congress.