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To: fuzzymath who wrote (24410)	12/10/1999 6:43:00 AM
From: Geoff Nunn	Read Replies (1) \| Respond to of 64865

Kevin, your statement makes sense, but iff the interests of management are aligned with those of shareholders. When these interests aren't aligned, a stock split may benefit management without benefiting stockholders. If a firm's management is entrenched, it may want to split the stock in order to fragment ownership of shares. As share ownership becomes fragmented and dispersed, the power of shareholders to control the firm is weakened. This plays into the hands of management, who gain power and autonomy at the expense of shareholders. Under such circumstances, short of a hostile takeover an inept management team can enjoy lifetime job tenure. The central problem under such circumstances is that there exists no small group of shareholders who own enough shares to control the firm. The firm is controlled by managers who are autonomous and answerable to no one, and who pursue their own interests not those of shareholders. Entire books in economics have been devoted to the question who controls the corporation, managers or stockholders? When ownership is fragmented the answer is clearly managers. Stock splits tend to promote fragmented ownership. JMO Geoff Nunn