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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (3340)	4/8/1999 2:07:00 PM
From: Scotsman	Read Replies (1) \| Respond to of 6846

No, I don't think so. Lets say there are a million shares authorized and trading. If the price is 100, than thats a cap of 100 million. Each shareholder has whatever percentage ownership represented by the number of shares held. So if someone has 100,000 shares, he has 10% of the company. Now it splits 2 for one. Now there are twice as many shares at half the price. So now you have 2 million shares at 50. Market cap is still 100 million dollars. And the guy that had 100,000 shares now has 200,000 shares of 2 million outstanding, or 10%. His ownership percentage has not changed. So as far are the shareholders goes the split will have no impact on percent ownership, which is the only thing they would be voting on, so they do not have to get shareholder approval. Now if the company had 1 million shares outstanding, none on the shelf, and needed more money, than they may wish to issue new stock. So lets say they want to go to 2 million shares outstanding. Not a split remember, simply more stock. The guy that had 100,000 shares of 1 million, or 10%, will now have 100,000 shares of 2 million, or 5%. Now that is shareholder dilution and hence effects the voting power of the shareholders. Hence shareholder approval would be needed.