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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: vpelt who wrote (1427)	4/1/1998 1:54:00 PM
From: DWB	Read Replies (2) \| Respond to of 5390

There is one slight difference. Yes, for all intents and purposes this will look, feel, smell, and taste like a 2 for 1 stock split. The only difference is that they aren't splitting the underlying par value of the stock in the process (as is usually the case), but instead are creating a new share which they are paying for out of cash reserves, and giving that new one two you (i.e. the bonus). The stock value will be cut in half after the bonus share is issued, but shareholder equity in the company will double (since there will be twice as many shares outstanding, each with the old par value). Here's a quote from the latest annual financial report... "In addition, the Board of Directors proposes that at the end of May, after distribution of dividends, a bonus issue of 1-for-1 is made, whereby one new share is received for each old share held. The par value of the shares will remain at SEK 2.50. The bonus issue will increase the capital stock amount from SEK 2436m. to SEK 4872m. through transfer from restricted reserves." DWB