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Biotech / Medical : Chromatics Color Sciences International. Inc; CCSI
CCSI 29.41+0.3%3:59 PM EST
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To: Manfred who wrote (704)12/24/1997 7:58:00 AM
From: JanyBlueEyes  Read Replies (2) of 5736
 
Info on "Stock Splits"

Here is some information regarding stock splits I found while surfin' around:

Several comprehensive analysis on split performance have unquestionably demonstrated that shares in companies that have split outperform the shares of comparably sized companies in both the short term and for long after the split.

There is no single technical reason causing splits to outperform the market by a significant degree. A reason is that stocks are perceived as better values and that the company is signaling that future prospects look outstanding. This perceived value is a signal for investors to buy. The market reacts favorably to splits because the split is typically a result of a period of strength in the company and the stock price. The split is often a consequence of excellent performance.

........a 2 for 1 stock split is going to cut the stock price in half. Therefore, the managers of the company are willing to let their stock trade in a lower trading range, but also doubling the number of shares outstanding. The advantages are two fold. The lower price makes the stock more available to the average investor who can afford larger blocks. The increased number of outstanding shares make it more liquid for institutions to be able to enter positions without dramatically affecting the price of the stock.

Without a doubt, stocks that announce splits, on average beat the market. Historical evidence supports this........

......Splitting companies generate returns of about 8% higher than matched companies in their sector which didn't split for a period of up to one year subsequent to the split. The explanation behind this is that a company which is willing to split its stock is signaling positively about the future prospects of the company.
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