Lucent Technologies (LU) Message Board

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Technology Stocks : Lucent Technologies (LU)

LU 2.415

+1.9%

Nov 21 9:30 AM EST

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To: Immi who wrote (1366)	2/14/1998 11:01:00 AM
From: Cytokine1	Read Replies (1) of 21876

Splits, my 2cnts: Say you have a $10 stock, 10 Mil shares outstanding. 10/1 split gives you a 100 Mil shares and a $1 stock (a penny stock) that most mutual funds would not own based on stock price ALONE. The other extreme is Berkshire Hathaway at $35,000 per share. Most investors can't afford one share (as part of a diversified portfolio). Not a liquid stock, huge spread. Some high priced stocks with small floats could benefit from splits which might provide liquidity, smaller bid/ask spreads. Low priced stocks with large floats can "cheapen" the stock--I mean that in a negative way--by splitting. Extreme examples, yes. What this has to do with LU splitting I don't know. But splits have a psychological effect. Gives the holder a warm feeling that the company is doing well enough to split. LU at $45 or $90, no difference to me. Martin.

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