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Technology Stocks : AUTOHOME, Inc

ATHM 25.20

+1.4%

Nov 6 3:59 PM EST

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To: David Harker who wrote (5537)	2/18/1999 6:04:00 PM
From: E. Davies	Read Replies (2) of 29970

While I hate to give into the nonsense that a split actually means anything I would like to make a counter-arguments just to cover all views: Growth stock prices are basically just priced on psychology. People buy & sell until the point at which the price "feels right". You sure cant base the price on PE. So what happens? Everyone "feels" that DELL @ 50 is cheap and DELL @100 is expensive. It actually means a lot to the psychology. The stock price also gives people psychological feedback as to the kind and quality of the stock. Everyone "knows" that a sub$20 stock for instance is higher risk and less stable. ATHM needs to be in the psychological levels of the major net stocks like AOL & YHOO. A price above $100 is a good thing, I dont think ATHM should even think of splitting until at least $200. How much impact does this mind-game stuff have? Hard to say, but I think it is a lot more and lasts a lot longer than the "rational" person will admit. Eric

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