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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?


To: Bill Martin who wrote (5789)3/5/1999 12:32:00 PM
From: KevinThompson  Respond to of 9256
 
I guess I didn't make my point clearly. Obviously, if supply of a commodity is increased, without a proportionally increasing demand, the price of the commodity in the marketplace will fall due to dilution of value per unit to the current owners of the commodity.

But my point was that in a markets where demand is ever increasing, for example in stocks like DELL, MSFT, and CSCO, or internet giants like YAHOO, AMZN, or AOL - a stock split is sometimes a catalyst to bring in more buyers on momentum and therefore continue the momentum for demand in the short term - which is what I was referring to by "price action" - short term momentum plays, not long term valuations.

The buyers want more shares. A stock-split provides the liquidity. They continue to buy more, and the price action of the stock after the split continues to climb.

Perhaps this wasn't a good analogy to the QNTM tracking stock idea.

Regards,
Kevin.