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To: Chuzzlewit who wrote (96474)2/9/1999 5:47:00 PM
From: stock bull  Respond to of 176387
 
Chuzzlewit, re:<<...So regardless, if the stock ran up, as in the case of CSCO in anticipation of a split, it will inevitably come down. The key fundamental underpinning is that a split adds no value to the company over the long run. Sure, it can get a lot of momentum players nuts over a period of a few weeks, but does it matter a year from now?>> Cisco is a good example, however, it came down just after Cisco failed to announce a split. You are absolutely correct in saying that a split adds no value to the company. Agree, the failure to split, and the resulting sell-off is a short-term event...a matter of days to weeks. "Will it matter in a year from now"...of course not. Who knows what would happen in weeks or months, to say nothing of a year.

Many thanks for your posting.

Stock Bull



To: Chuzzlewit who wrote (96474)2/10/1999 3:21:00 AM
From: On the QT  Read Replies (3) | Respond to of 176387
 
Hi Chuzz,

"The key fundamental underpinning is that a split adds no value to the company over the long run. Sure, it can get a lot of momentum players nuts over a period of a few weeks, but does it matter a year from now?"

I understand what you are saying and I tend to agree with your logic. But as you probably guessed here comes the catch.

There is some evidence to suggest that stocks that split tend to outperform the overall stock market by over 4% the following year!

Regards,

QT