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Technology Stocks : (LVLT) - Level 3 Communications
LVLT 53.630.0%Nov 1 5:00 PM EST
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To: Jim Furley who wrote (1149)7/20/1998 7:34:00 PM
From: SDR-SI  Read Replies (1) of 3873
 
Jim:

Generally if a stock dividend is a small percentage, it is referred to as a "stock dividend"; if the dividend distribution is a high percentage of the number of shares (like 50% or 100%) it is referred to as a split. In either case it is the same thing - a distribution of shares pro-rata to all existing stockholders, which has no effect on the percentage of the corporation's equity each stockholder owns.

A stock dividend of sizeable enough percentage to be referred to as a split, is usually done to reposition the company's per share price to make it "more attractive" to investors. sometimes this is done to keep the price in a range comparable to other companies in the same business. Sometimes this is done so that the range of upward movement before a stock bumps into a "psychological barrier" (like 100) can be re-established. Many companies traditionally "split" their stock whenever it climbs into a specific range. Traditionally, stocks that "split" are considered to be "up and coming" investments and a split is usually considered a "bullish event" that garners good exposure for the stock.

All of that said, on the day of the payment of the dividend nothing "real" really happens, just "psychological" or "mood setting" things.

Steve
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