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Non-Tech : InvestRight Club Challenge

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To: Francois Goelo who wrote (1118)3/25/1999 2:32:00 PM
From: R F B, Jr.  Read Replies (1) of 2662
 
Francois :

The article makes several good points, however....

The general market mentality, imo, percieves a stock/company to be worth a certain price. When an $80 issue splits 2/1 down to $40, people believe the stock to be worth $80 and the issue tends to rise. Conversely with a reverse split.

I've seen many issues reverse, 1/10, only to have the stock fall back to the price at the original split ... or... below. Why??? The market sees the stock as overpriced at current share value. Right or wrong is not the issue. The fact that it happens more often than not is the important thing from an investor's standpoint.

Regards,

RFB
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