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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (17545)	3/24/1998 9:05:00 AM
From: j g cordes	Read Replies (1) \| Respond to of 50167

Morning Jerry and Ike, you'll enjoy this from Briefing on splitsville: Unfortunately their stock selections are in graphics that won't print here, so go to the url and print it out. briefing.com "Splitsmania! Daily commentary updated for March 24, 1998 We have finally figured out how to create wealth. Big time wealth. Double your money overnight wealth. We here at Briefing.com will go public at $10/share and immediately declare a 4-1 split. We figure that's worth about 300% on the stock price overnight. We'll even choose the ticker SPLT just to ensure our success (it's not taken yet, can you believe it?). That is pretty much the state of the market these days, particularly when it comes to stock splits undertaken to meet new Nasdaq listing requirements. Splits Candidates We don't understand it, but we can see it, and we must therefore offer our clients a preview of splits still to come. Here's the story. The Nasdaq, as part of a revamp of its listing requirements, has set a minimum float of 500K for companies on the Small Cap market (float is shares outstanding less shares held by company insiders or individuals holding more than 10% of the stock). For companies listed on the national market, the float minimum is 750K or 1100K, depending on the initial listing. These new requirements took effect February 23, but companies were allowed to file an appeal and they have 30-60 days from March 27 to be in compliance. An Impressive Record The easiest way to meet the new float requirement is to split your stock, and we have counted at least nine companies that have done this -- some as early as January, one as recently as Monday. These companies are listed in the table below (this table might not be comprehensive), along with their stock performance in the wake of the split. The smallest gain is an impressive 24%, the largest a breathtaking 309%. Read 'em and weep. NOTE: go to the url, as the list won't format here Weep, but don't despair. The splits parade is most likely not over yet. We have completed a stock screen of Nasdaq stocks in an attempt to ferret out companies that are still below the minimum float requirement. Before we present this list, we must deliver a bevy of serious warnings about this list. 1.Companies on this list will not necessarily split their stock -- there are other ways to increase float (insider selling), some companies on the National market might just move down to the Small Cap market, and others may fail to meet other requirements and may ultimately be delisted altogether. This is a serious risk; so be careful! 2.Some of these companies may be lousy companies and their stock price might fall whether or not they split, and you could lose a lot (or all) of your money. 3.As many of these companies are small cap and have minimal float, they are extremely illiquid, often not trading for weeks at a time. You may get into the stock but find it hard to get out. 4.In other words, buyer beware. Choosing From The List If you're crazy enough to buy these stocks just because they might split, research these companies and choose ones that you would feel comfortable owning even if the stock never splits, because the reality is that many probably won't split. We only briefly looked at the fundamentals of these companies and there are some intriguing stocks here with or without the split potential, but we didn't study the fundamentals in any depth and do not feel comfortable making any specific recommendations. In addition to doing a little research, you might also consider calling the company to ask about the Nasdaq requirements. While we had trouble getting through to these companies (some don't even have investor relations departments), some were willing to talk about the issue, with one CEO (Sage Labs, SLAB) even admitting the possibility of a split (though he was contesting the ruling that he was short of the float minimum). Another (American Locker, ALGI) has publicly stated that it might split its stock to meet Nasdaq requirements, but has not formally announced a split yet. Alright, enough of the warnings, let's turn to the list. NOTE: go to the url, as the list won't format here Good Luck, You'll Need It Note that we almost certainly missed some companies that will split due to the float requirement -- the Nasdaq listing issue is complicated and the float data are not always reliable, making a complete list impossible. Finally, be advised that we think that stock price surges due solely to splits are inherently irrational and that trying to make a living playing splits is probably not the path to riches. We also realize that the first table presented herein unveils some astonishing gains and that our clients don't care about rationality, they care about making money. In that spirit, we wish you good luck -- you'll need it in the splits game." As an aside, I appreciate the irrational buying that goes with a split as coming from two sources, right or wrong. 1. Its percieved that investors are getting twice as many shares at a lower price. The lower price is perceived as a 50% sale to the real value of the stock. I know... forget the math, it doesn't make sense. 2. The second perception is that the stock wouldn't split unless managment was confident to lower the price, or to give away an extra share to current stock holders. Yup.. that doesn't make sense either but try giving a child 1 quart of milk and ask if 32 quarter cups isn't a lot more, especially as the child thinks each 1/32nd cup will turn into a quart again. Jim

To: Jerry Olson who wrote (17545)	3/24/1998 10:21:00 AM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

OJ--- I have a similar feeling like S&P break at 990 on SOX, it is coming either around 290 or at 260 but some here lies last hope for making money on long side on stocks like CSCO ASND COMS-- I wish I could be more reserve on direction of the market but cannot help it- Lets keep this under close observation I am not giving SOX a complete bill of clean health but DDX NWX SOX are sectors to watch carefully, above 292 close and above 195 on DDX I will try my run again with tight stop loss at break of 280 or 182 on DDX- That is exactly I am watching.