I have never known stock splits to be announced outside of a quarterly or annual meeting. Not saying it does not happen, but I do not recall ever seeing it. If RFMD is going to split, I would not expect it to be announced until the next earnings announcement in Jan2000.
RFMD stock price is quite overpriced IMO. I would not buy it here. But, it's in what seems to be the hot sector du jour. We saw what happens to the 'nets last year.
This year, QCOM and BRCM seems to have entered the realm of "greater fool theory", is RFMD getting there??
Greater Fool Theory:
Last year AMZN, EBAY, AOL and YHOO went up and up and kept going. Many investors who had a concept of value stayed away, other moved in simply because it was going up. They believed they could make a quick $10K and sell out before the inevitable crash occurred. PE had no meaning whatsoever. They believed that a greater fool than they would buy the stock at a higher price. Ultimately, the stocks peaked out after a few days of meteoric rise, some got out with magnificent profits, some held on, yet others, the "greatest fools", actually bought in at the stratospheric highs and faced massive paper losses.
If this scenario is playing out this year with BRCM, QCOM, and maybe RFMD, then we should still be in the early innings of the rally.
Last year at this time, AMZN stood at 22-ish (post split), it topped out at 90 in late January. EBAY tripled from this date last year to late December, then doubled again by May, then it tanked to its current level.
Any comments??
Warren |
