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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Jorge who wrote (11464)	10/13/1998 8:56:00 PM
From: Jason Cogan	Read Replies (1) \| Respond to of 13594

George: I don't think you're getting it. The intrinsic value of a company has nothing to do with the number of shares. It's like saying you get more pizza by splitting the pie into tinier slices. It's just not true. Splitting the stock excessively does have the short term effect of creating a bubble. In essence, convincing many small investors that they must be getting a good deal, and therefore inflating their short term expectations and stock price. But, inevitably, this results in a dangerous situation for the average investor, encouraging speculation over investment. That is precisely why Buffet and Wells Fargo do not split their stock. They want long term investors, not short term lottery ticket holders. Don't you find it troubling that at the same time AOL is splitting, supposedly validating their rosy future, the largest shareholders (ie. Case) are selling like there's no tomorrow? Regards, JC