FreeMarkets Inc-(FMKT) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : FreeMarkets Inc-(FMKT)

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Steve Antonelli who wrote (176)	1/2/2000 8:31:00 AM
From: Ron Kline	Read Replies (1) of 414

Ron, just curious. What difference does a split make? In my opinion a split on paper means nothing as most people have learned from CNBC and others that drill that into all of us. But just because it may not mean anything on paper there are some slight differences between having a split or not. I believe these differences can have a positive effect on the stock price. 1) Usually a split has been shown by management to mean that they believe the prospects going forward will be good. If they feel a stock is very high and extended then they will hold off on a split because they think that over time the stock should settle down and become affordable; therefore, price will take care of the situation. I say usually because we all know of certain stocks where it was a top (IOM comes to mind). This is just law of averages. 2)When a stock comes public with very few shares outstanding a split can be very important in that most funds will not touch a stock until the float becomes greater. This allows the liquidity they need to take or remove big positions. Net Net is that it can be a positive in the "long term" since institutions and funds are a big part of stocks making big moves forward. YHOO added to the S&P is an example of the effect these organizations can have. 3)Lastly I would say that split news can act as a catalyst for people to take notice of a newer company. I remember when CMRC and JNPR made their split news it hit all the headlines and a lot of people I know decided to take a position after because they started to do research on the company. The only other thing I would say is we all know some of the biggest winners over time are stocks that split their stock. Think of CSCO, MSFT, or DELL and the fact that they were splitting their stocks almost once a year was a clue that things were going well. One stock split isn't going to do it but for me split news gives me valuable information even though as I said on paper it means nothing. I myself seldom buy stocks based on split news rather it gives me a clue to the stocks I'm holding now. Ron

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next