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The boilerplate reason companies do splits is precisely what you suggest - to increase liquidity. However, another way to look at liquidity is supply and demand. Post split, if you still want to own CCSI, you're not going to sell your stock. If you own $50,000 worth and want to sell $10,000 worth, after the split, you'll just sell more shares in order to raise the $10K. Similarly, if John Q Public or a fund wants to buy $1million worth of stock, they must find sellers of $1 million worth before or after the split. A 3:2 split puts the stock around $10, and retail investors who have never taken a finance course may think that they can make more on a $10 stock than on a $20 stock, not being able to do the math that shows that a 100% move on a $20 stock will make you the same amount of dough as a 100% move on a $10 stock. In the short run, splits will attract that type of investor - the Wade Cook numbskull, but in the intermediate and long term, splits do nothing to add value, and when done on low priced stocks that are losing money, are a sign that management is trying to prop things up. I cannot tell you when the stock will break, especially since no analyst follows the stock so there are no estimates to be slashed. I cannot give you a catalyst, other than time and competition - SPRX, wheras people posting on this thread tend to give CCSI a 100% market share! However, I have made 4 points shorting this pooch and have since moved on, and post merely to alert the honest ones out there that on occasion, what goes up, can come down. |
