Barry, If AOL did split, the converts would just adjust. A 2:1 would bring the conversion price down from 104 to 52, just like any option when a stock splits (convertible securities are securities with an embedded option on the common). If the stock did split, I anticipate all the Wade-Cookies of the world, people who think a 2 for 1 split means something more than twice the shares at half the price, will bid it up short term. Whether or not a split will happen, I have no idea and no real opinion. Institutions usually like highly liquid and somewhat higher priced stocks so they can move in an out without moving the market. AOL's already got enough liquidity. Also, sometimes companies get the mistaken notion that through stock splits they can point to how well they've done for shareholders. In fact, splits often occur near highs.
On the AOL buyout suggestion from Paine Webber--I find that a complete joke. As I've said before, the most I can get out of AOL on valuation is between $40 and $60 a share, depending on how I tweek the numbers. Until I understand what use someone would have for AOL at this price level, I'll keep laughing at the joke.
Yes, I still think AOL can get to $100/shr between now and when earnings are released, though I'll have to look up the symbol for the 100 puts. AOLNT? Something like that.
Best,
-Steve |
