Ken:
Thanks very much for trying to be helpful, but my question had nothing to do with splits. I understand splits quite well, thank you, although I've never understood why they often cause share prices to spike. Please go back and read my post to Mark Peterson. You probably thought I was talking about splits because CMGI is splitting.
However, since you did bring up the subject of splits, let's talk about it. I know, of course, that a company is not a pie, but a pie is a common analogy for a company, and a slice can be analogous to shares. Using this analogy for the split, you don't have more pie, just more pieces. But if a company issues more shares, they are creating more pie, and if you happen to be trading slices of pie, your slices were more valuable when there were less slices available. However, if everything else is favorable, and demand for slices increases, then the value of your slices may hold anyway.
REgards,
DJO |
