AMERITRADE HLD A (NASDAQ:AMTD) Message Board

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Non-Tech : AMERITRADE HLD A (NASDAQ:AMTD)

AMTD 0.980

-3.0%

Jan 30 9:30 AM EST

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To: Gil Gilbertson who wrote (297)	7/24/1998 10:39:00 AM
From: smartInvestor	Read Replies (1) of 1848

Sorry that this is off-topic but it seems to be relevant to the stock. As to the funds, the reason they like a larger number of shares is to increase the liquidity that is not present in a thin stock. A mutual fund has to be able to move a position in and out without disrupting the market Can someone just explain briefly why a split increases liquidity? My understanding was that there was a very slight increase in liquidity for the small investor who may not be comfortable buying an odd-lot and that there was a slight upward pressure on the stock price because of the perception that managment thinks their stock price is going to move higher. It would seem to me that a split is irrelevant to large buyers since the percentage of the company floating remains the same. A large investor wouldn't care if it takes 40,000 or 20,000 shares to take a $1 million position. What am I missing? TIA.

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