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To: On the QT who wrote (96970)	2/11/1999 10:36:00 AM
From: On the QT	Read Replies (2) \| Respond to of 176387

Are Stocks Splits good for shareholders? Well here is what I am able to add to our discussion. The source of this is Money Magazines Wall Street editor, Michael Sivy. " It is generally thought that a split is a sign that a stock has bright prospects. And several studies confirm this belief even though it isn't completely logical. When a stock is split two-for -one , for example, an investor who formerly owned 100 shares ends up with 200. But since all shareholders have double the number they had before, nothing changes but the number of pieces of paper. Everyone's percentage ownership remains the same and the company still has the same earnings and assets. >>Nevertheless, several academic studies have shown that splitting a stock can improve its performance.<< Analysts cite several possible explanations, For starter, managers decide to split a stock because they think its price is so high that it might be out of the reach of some potential investors. This problem usually arises when the stock has risen considerably over the previous year or two . More important, the company's executives wouldn't split indicates that top mangers believe a strong stock will continue to appreciate. Further the evidence show that the benefits of a split go beyond signaling the options of insiders. First,. Dividends are often rounded up, which gives the yield a boost. In the case where a stock paying .75 a quarter splits two-for -one , each post split share might pay .40 cents. Second the fact that more shares are trading makes the stock easier for large investors to buy. Finally, since splits lower the share price , they make a stock more affordable for investors who want to buy in round lots of 100 shares and have limited funds. The bottom line is that splits are unquestionably a positive sign. One recent study by Ford Investor Services in San Diego found that stocks split two for one outperformed the overall stock market by more than four percentage points over the following year". Well this is it. For me,in what it is that I accept as valid for now is: Most likely, good listed stocks that split will probably out earn stocks that did not split a year from now. Any other positive inference to be derived,in light of the lack of more specific information,falls under the heading of perhaps. Regards, QT