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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 230.92+3.1%Nov 24 3:59 PM EST
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To: Cary Salsberg who wrote (10180)6/6/2004 12:35:38 PM
From: Big Bucks  Read Replies (1) of 25522
 
Cary "Dilution has nothing to do with supply and demand. Dilution affects stock price in the obvious way, more shares, lower price. This is arithmetic. Cut a pie into more pieces and the pieces are smaller. It doesn't tell you anything about how hungry for pie people are. Some might say that if the smaller pieces sell for less, demand for these particular pieces might increase and that is usually the rationale for stock splits."

Let's look at it from a different perspective.....
There is 1 pie, and 6 people who want a slice of that
pie, who are willing to pay $1 for a slice. All things
being equal, each slice is actually worth $1 each. Now
lets assume that the pie is sliced into 20 pieces with
6 people still wanting a piece of pie....are they willing
to pay $1 for a smaller piece? It depends on how hungry
they are or if maybe there is another similar 6 slice pie
that they can get for $1..... Who determines what is a
bargain? Those buying the pie or those selling it?
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