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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU)
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To: mandingo who wrote (7688)5/27/1998 11:19:00 PM
From: Jon Tara  Read Replies (1) of 18444
 
You are exactly right about the benefits of splits and stock dividends. (Essentially the same thing.)

The increase in a small float is a positive. It permits a more orderly market. Yadda-yadda.

However, the price will drop in half - it has to, or somebody has pulled the wool over the eyes of investors - with the full cooperation of market-makers. IF this is the case, heads will roll, and so I still think there is just some confusion over the date.

Whether you call it a split or a dividend, it's the same thing - the company is just handing-out shares. They are just printing pieces of paper. Except for the positive effect of a more orderly market, there is no value in the split (or dividend), and there is no INTRINSIC value in it at all.

Merrill ain't gonna buy into it anyway, since most institutions won't touch a stock under $5, and many won't touch micro-caps and won't touch stocks that don't have options traded on them.
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