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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: JDN who wrote (9241)2/18/2000 9:15:00 AM
From: Lynn   of 17183
 
Dear JDN: I agree with everything you say in your posting. To comment on this section:

>I really think there would be more excitement in this stock if they split again.

I have noticed how stock splits have become very important to investors. In the pre-internet investing days, when all people had brokers, splits were nice but many shareholders did not even know a split was in the make until the split was noticed on one's statement.

There are 'investors' today who use, as a criteria for investment, whether a stock is in split range. A split announcement is cause for them to jump on the shares so they do 'not miss out' on the split run--after which they dump their shares before it retreats.

Look at what happened to NTAP two days ago. The fantastic earnings release were not themselves responsible for the tremendous jump in the price. It was the announcement of a 2:1 split in the earnings report.

This split craze makes money for traders but it hurts new, long term investors who do not know or play the share split game. They could easily mistake a stock's rapid, short term movement for some kind of statement about the company in general and buy shares at the wrong time, getting less shares than they could buy if they had studied how stocks react in the period between split announcement through post split correction frenzy.

Regards,

Lynn
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