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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (44368)	7/7/2000 4:05:23 PM
From: mph	Respond to of 63513

Makes sense to me. I figure it will be trading at 30+ post split. Later!

To: Jorj X Mckie who wrote (44368)	7/8/2000 9:24:57 AM
From: Don Pueblo	Respond to of 63513

I agree. Splits, at least early on in the overall history of a publicly traded company, are as a rule, suggested/advised upon by the lead underwriter that took that company public. Wall Street does have a significant influence on the movement of a stock. Underwriters (market makers) will crush a stock if they feel they are being manipulated by the company. It's amusing in a bizarre way, since some people claim that the stock markets are manipulated by the market makers. Maybe the MMs don't like their own medicine G. GNET is a good example of a company that had absolutely no reason to split two different times in one year. I personally have never understood the reason why any company felt the necessity to split twice in a single 12 month period other than to jack around with the share price. I personally think it's an indication of a naive attitude toward the stockholders and their investment at best. Inexperienced shareholders generally applaud splits no matter when they happen or why. The fact is that there is no reason to ever split a stock except to make it more attractive to new buyers. This is not necessarily bad, the stock becomes more liquid, and that can be an advantage for acquisitions for example. If the overall conditions of the company or the market in general suggest that there is a possibility that the stock will not perform after it splits, a split can be devastating to shareholders for the exact reasons you described. It's easier for a 25 dollar stock to go to 35 than it is for a 50 dollar stock to go to 70, but it certainly appears that it's also easier for a 25 dollar stock to go to 18 than it is for a 50 dollar stock to go to 36. Remember the basic underlying principal of the stock market; the people that facilitate the exchange of a share of stock take a percentage of the transaction as a commission, and an "average buyer" would much rather own 10 shares of a 20 dollar stock than one share of a 200 dollar stock.