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Technology Stocks : JDS Uniphase (JDSU)
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To: Master (Hijacked) who wrote (3693)1/3/2000 9:29:00 PM
From: t2  Read Replies (1) of 24042
 
However, the timing of the announcement has me a little baffled. Why did they not announce a 4 to 1 split rather than two back to back 2- splits??

You have to remember that the first stock split was announced around Oct99 and since it needed shareholder approval, it took a long time to take effect. The stock has come a long way since then. In addition, the management has no way of know how their stock will do. A lot depends upon the market conditions and those turned out very positive for the Naz in general. If the Naz was at 2500 at year end, i don't think JDSU would nearly be where it is today. It is obvious that a stock of a company like JDSU will be a lot higher with a naz hitting 4000.

If you are stating that why are they not splitting 4 for 1 now, the answer is quite simple. A 161 stock price(previous close) does not warrant a 4 for 1.

Could the earnings perhaps NOT meet expectations and the second split announcement therefore is simply a way of cushioning the drop if that were the case???

I think it is the opposite. They see that earnings are good. If management believed they were going to miss the earnings estimates, i don't think they would have announced a split. In that case, they could have waited for the actual earnings announcement. I believe they will either meet numbers or blow them away.

Another factor in announcing the split now rather than at earnings is that shareholder approval is required. They wanted to speed up the process. Not only that, it appears that the next split after this one won't need approval at all since the authorized shares will be sufficient. It could take effect a month after such an announcement. I think they don't want to be going to the shareholders too often just to increase authorized shares. That is another bullish sign--the next split could come sooner if the stock keeps going up. If it gets added to the S and P500, the next such announcement may not take that long after the March split.

good luck
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