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To: Rich Investor who wrote (34936)	1/14/1999 4:41:00 PM
From: H James Morris	Respond to of 164684

Kris>>I've been following this thread with great interest since it first started in May 97, although never posted up till now<< Welcome. You have the privilege to say that you participated in the "biggest gain in the history of Wall Street history". Take it. Why not?

To: Rich Investor who wrote (34936)	1/14/1999 6:09:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Net frenzy spurs hunt for fools NEW YORK -- Count it as another marvel of the Internet that never before have so many self-consciously and publicly embraced Wall Street's Greater Fool Theory of speculation as are playing that suckers' game now. The theory, just to be clear, says that it is OK to buy a stock at a foolishly high price as long as an even greater fool will buy it from you at an even higher price. In normal times, the theory usually gets bandied mirthfully in discussions of the general market, such as when nervous investors talk hopefully of foreign investors naÔvely coming to bid a high stock market higher. But now the gambit is taking on unusually visible urgency among speculators in Internet stocks. You can see the search for greater fools in the recent one-day stock surges of 15% to 50% on news that shares are being split into smaller denominations that might appeal to additional buyers. The surges stand out because a stock split adds nothing to the value of an enterprise being shared. Nor do stockholders own more of a company after a split than before. All that changes is the per-share value of the stock, say from $100 to $50 in a possible 2-for-1 split. The lower denomination after a split is critical if you're looking for greater fools. Modestly priced stocks are perceived to be more affordable and less risky. No wonder, then, that there was whining and complaining among Yahoo! speculators Wednesday night on the message board kept on the stock at www.yahoo.com after its split announcement. The beef: that management split its shares, then trading at about $400, only 2-for-1, translating into $200 a share. A 4-for-1 split would have meant $100 a share. "A 2-for-1 split will still make this a very expensive stock for the majority of individual investors to buy," griped one poster known as Andres52. "I see the stock therefore losing steam. Don't the company officers have some sort of fiduciary responsibility to the shareholders?" Another, known as Tooch1971, added: "Perception is everything. We can all agree that valuations mean nothing in this stock." A third said that Yahoo! should have split 3-for-1 "to attract investors." Yahoo! shares opened down 66 7/8 Wednesday and rebounded to close down 34 at $368 . The company declined to comment for this column. Steve Harmon , who writes the daily Internet Stock Report ( www.internetnews.com/stocks/), says while most buyers of the stocks are driven by enthusiasm for the sector, "the Greater Fool Theory is at play. That's an element." People played the fools' game in the 1920s with radio stocks, too. But those speculators weren't from such a cross-section of the nation, nor did they post on an Internet. Splits have only become a big deal in the past year or so. Before then, a 3.5% gain on the news of a split was typical, says David Ikenberry, professor at Rice University. Those modest gains made some sense because they signaled established business success and management's confidence in the future. In fact, most companies used to announce splits when earnings were climbing enough that directors could also announce they would be paying cash dividends. Splitting shares any other time was a desperate ploy and attracted regulators. "It smacked of manipulation," says Bob Stovall, a money manager who came to Wall Street in 1953. By David Henry, USA TODAY