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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Wyätt Gwyön who wrote (104141)6/30/2008 10:17:19 PM
From: Paul Senior  Read Replies (3) of 206323
 
Splits may be totally irrelevant as regards the capital owned per shareholder after vs before the split.

That is a different matter from the issue of whether stock splits affect the stock price more than the mathematical ratio involved, and if a speculator can anticipate and benefit from the stock split announcement and delivery.

I operate from the position that yes, there is a pattern to stock splits that might be considered, namely:

1. The split is announced. This good news raises interest in the stock and moves the stock price higher.

2. The stock split occurs.

3. People decide to sell a partial position once they get the "additional" shares. The stock declines.

To me, I note it as a pattern. Just my view.

Regarding DELL which you mentioned. Last split in '99. Stock rising until actual split, declining soon thereafter. (Well, if I read the squiggles correctly)

finance.yahoo.com

Or COSWF which you've mentioned recently. A rise leading to a drop right after the split.

finance.yahoo.com

Perhaps jmo and there's nothing to this anecdotal stuff. Reinforces my view though of what I suspect I often see.
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