America On-Line (AOL) Message Board

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Technology Stocks : America On-Line (AOL)

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To: Jorge who wrote (1189)	1/4/1999 11:05:00 AM
From: Chuzzlewit	Read Replies (1) of 41369

George, you are correct. If company A agrees to swap its stock 1 for 1 with company B to effect a merger, and if company A then splits its stock two for one, then at the time of the merger company B shareholders get two shares of A for each share of B they own. This is exactly the same thing that happens with options. If you own one call option of company A presplit you own 2 calls after the split. I don't know why people like to create such problems for themselves! The marketplace would never tolerate anything else. TTFN, CTC

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