Hard to say. As I said, I am just an observer here. Obviously if QNET has earnings, EPS will now be down by 75% due to dilution. I realize that internet stocks aren't valued based on earnings <VBG>, but if they were, then the stock price should open up down 75% tomorrow. That way the market cap of the company would be unchanged. This is assuming that buyers today were getting the extra shares. Thus my guess is that the stock tomorrow opens at $5, or gets there rather quickly, but time will tell.
Let me add that I have no idea what the "true" value of the underlying business is, or the "real" value of the shares. If the value was artificially increased by people buying shares to get the stock dividend (as I suspect), then that artificial increase should quickly disappear as well. Thus if the stock was really only worth $8 before the dividend, then the stock should go to $2. If it was worth $2, it will go to $.50.
As a practical matter I assume that people who bought today to get the extra shares will want to sell tomorrow. The only people buying tomorrow will be those who think that the company is worth the asking price and who actually want to own shares. Thus the mystery is, what will that price be. Since I don't know the underlying value, I have no idea where it will head, which is why I didn't short the stock. But I am sure that eventually the stock price will be the value of the underlying business divided by the number of shares outstanding.
Good luck,
Carl |
