ragingbull.altavista.com
By: GL5KWASH $
Reply To: None Friday, 8 Sep 2000 at 11:55 AM EDT
Post # of 3493
Regarding 15-for-1 split...
Many are questioning why a company that's only $1 per share would split 15-for-1, when the objective is to get on NASDAQ, which requires a minimum of $4 per share for 6 months. Is everyone familiar with BIFS ? They had a 100-for-1 split back in April. Unheard of ! The reason was because they had little cash but a great product. So they increased the number of shares in order to use the in acquisitions of other smaller, perhaps struggling, companies. They were able to buy companies with stock, under the assumption that with their great product, the price would rise dramatically. Lest we forget, SSCP is negotiating the purchase of 4 companies ( one, already completed, e-piggybank.com ). Likely, SSCP is going to make their acquisitions largely with stock. So it makes sense to increase the number of shares by 15-to-1, since post-split, they still will have a relatively small number of outstanding shares. In addition, the split will draw others to this stock that would not have even noticed the company had the split only been 2-for-1, 3-for-1, or maybe even 5-for-1. So they'll raise capital, increase stock value, complete acquisitions, grow the business, all with no cash outlay on their part. Very good business. |
