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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: zuma_rk who wrote (12715)	12/14/1999 9:51:00 AM
From: zuma_rk	Read Replies (1) \| Respond to of 20297

Jeez -- it just gets weirder and weirder. Can you believe a company that trades at 9 1/4 has the balls to announce a two for one split (the SECOND in a month and a half!!!). Even though it's OT, this article about Track Data, courtesy of the Motley Fool, is a must-read... Tulips, tulips and more tulips......!!! fnews.yahoo.com More Stock Split Fun at Track Data By Brian Graney December 13, 1999 So, what do you do if you are a savvy company, with a "next big thing" online business plan, and your stock has appreciated 43% since you last announced a stock split just over a month ago? Why, you split the stock again, silly! This is exactly the kind of no-nonsense, shareholder value-driven thinking filling the cranial confines of managers at real-time financial market data provider Track Data Corp. (Nasdaq:TRAC - news) , which gained more than 20% this morning after announcing a two-for-one split. Never mind that the stock was only trading at $9 1/4 per share prior to the split announcement, hardly a level that can support the typical high share price, psychological justification for a stock split. Further, never mind that the company just announced a two-for-one split on Nov. 1. None of that means Bo Diddly-squat when a quick 20%+ share price pop can be had with a simple 111-word press release (not including the required boilerplate stuff.) Of course, Track Data would have you believe that it's doing more splits than Mary Lou Retton in the name of its shareholders. "With only 25% of our common stock owned by the public, we believe the stock split will provide greater liquidity for our stockholders, as well as attract institutional investors,' surmised chairman and CEO Barry Hertz. Sure, keeping the float low creates market distortions; just ask K-tel International (Nasdaq:KTEL - news) or Siebert Financial (Nasdaq:SIEB - news) . But splitting the stock won't change the fact that a quarter of Track Data's shares will still be out of reach for interested Track Data "owners," since Hertz's personal 75% stake in the company won't change a whit. Actually, calling the folks holding Track Data's current float "owners" is probably overly generous, considering almost a third of the float is being "borrowed" by individuals selling the stock short. Hertz has done an admirable job of trying to shake out these nonbelievers over the past few weeks, putting out press releases extolling the company and its products on Business Wire every single trading day between Oct. 29 and Nov. 24. The release on Nov. 17 was completely over the top, tagged as it was with the golden headline "Track Data Announces No Press Release Today." Other releases mostly touted the company's myTrack online pay-per-view trading and market data service (variations of which, you'll be happy to know, can run on Linux, which the company saw the need to announce twice last week.) One day, the firm actually reported that it had incurred a third quarter loss of $0.08 per share, tallied neatly in an income statement that would make any self-respecting accounting professor cringe by including only revenues, net loss, and net loss per share accounts. So, what does all of this mean for investors? Not much, except to underline the fact that stock splits do ZERO to change the intrinsic economics of a business. Perhaps a further lesson can be learned from a CEO who claims to be concerned by his company's low float, then proceeds to churn about 25% of the non-shorted portion of that float in a single morning thanks to a stock split announcement. I thought the whole idea of "building shareholder value" was to keep the shareholders around long enough to receive some of the eventual increased economic value of the business. Apparently, Hertz doesn't seem to care much about who owns his stock or for what reasons. And why should he? On paper, today's stock split announcement increased the value of his Track Data shares by about $58 million. Now that's what I call building value for the shareholder, rather than the shareholderS.