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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Big Bucks who wrote (10329)	6/10/2004 3:23:08 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 25522

From a Bear Stearns' report on the industry: A deceleration of order patterns for the equipment companies has occurred and now we await the reacceleration phase. In our view, this will occur in September, and we believe that the Street is starting to agree with us. However, equipment customers are still a bit on the cautious side.

To: Big Bucks who wrote (10329)	6/10/2004 5:15:24 PM
From: TimF	Respond to of 25522

That is not a valid question regarding stocks with billions of outstanding shares Yes it is, the situation is very similar. X number of shares priced a Y are exactly equivalent to 2X shares priced at 1/2 Y. This is true whether X is 1 or billions. I repeat again, most funds will maintain a set % of a companies stock in their portfolios, they prefer not to maintain to much of a specific stock, especially if there is no dividend assigned. When a stock splits 1 - The dollar value of the stock stays the same. 2 - The percentage of their portfolio that the stock represents stays the same 3 - The percentage of the market cap of the company in question that the position represents stays the same. IMO, most institutions and funds that want them already have plenty of shares of a mature company like AMAT. I doubt that most institutions and funds are so irrational as to care about the number of shares that they own rather then the value of the position they own. Newbie small investors might be irrational in that way but even many of them are not. Why do you think that various companies do share buy backs? 1 - Because there was tax advantages to share buy backs over dividends and in some case the buyback still get better tax treatment. 2 - To compensate for dilution due to stock options. Splits don't dilute the ownership because everyone who owned X shares now own 2 shares that are worth half as much. Everyone has the same amount of pie they just have twice as many half sized pieces. But stock options and grants do dilute the stock. If the dilution is 10% its like they cut your pieces up into 10 smaller pieces and gave one of them to someone else. They are trying to reduce the shares outstanding because demand from investors is lax and the stock is foundering around and not moving The demand is for so many dollars worth of shares. If the demand really was for X number of shares then a 10 for one split would reduce the market cap of a company by 90%. Tim