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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 242.44+5.0%3:59 PM EST
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To: Big Bucks who wrote (10176)6/7/2004 11:33:35 AM
From: Kirk ©  Read Replies (1) of 25522
 
RE your comment to Cary

Regarding your argument about increasing valuation before a stock split, I would suggest that after a stock splits the premium typically goes away for quite a while as
the market tries to digest the increased stock available. Typically the price of the stock will DECREASE
after a split, until such time as DEMAND again increases the premium assigned. There is a point at which
excessive available stock dilutes the value, it correlates
directly with demand..... BB

Do you think Calpers cares how many shares of AMAT it has?

Do you think Vanguard will sell some of the AMAT stock in its index funds after a stock splits?

Do you think WEB will sell half his Coke shares if Coke splits its stock?

I think your comments are valid for smaller stocks where there is not a large institutional holding. The small players who don't understand that price or number of shares don't matter as individual variables are a larger percentage of the share float for small caps...so their lack of knowledge can be exploited (some of us have been doing it well enough that we don't have to punch a time clock) but they hardly make a difference for large cap stocks in the S&P500.

Kirk
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