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Technology Stocks : InfoSpace (INSP): Where GNET went!
INSP 89.94-0.8%10:37 AM EST
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To: Bob Duncan who wrote (1068)1/23/1999 5:14:00 PM
From: J.N.N.  Read Replies (1) of 28311
 
Will someone explain the mechanics of a stock split to me in the specific case of GNET.

An example, if you are long, and the stock is, for example $100/share. The stock split objectives is to increase float and allow liquidity/Institutional Investors.

If you believe that this stock is undervalued, in reference to the astronomical valuations to its peers - splitting a stock DOES NOT - theoretically increase float because the longs will not sell at $50/share.

An issuance of more shares - Not A Split - would increase the float because more people would be able to buy shares since more would be available "In The Market". I think that the people who own now - and believe that they have a good thing (insiders) would still not be selling if they were issued more shares via a split. This would mean that the same # of active float shares would still be available, and no more new shares would be available unless they appreciated greatly from their post-split price.

To my thinking, the split is a stock dividend. Or am I naive enough to believe that this stock will go down to $50 post split and remain there.

Lycos currenly has a market cap of almost 5 Billion. GNET's is 540 Million.

Waiting to Hear.
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