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To: DJ Oglesby who wrote (7753)	4/29/1999 1:50:00 PM
From: keta	Read Replies (1) \| Respond to of 19700

Well, if shares are issued in order to acquire another company, for example, then there may or may not be any stock price erosion from dilution depending on the value of what they acquire.

To: DJ Oglesby who wrote (7753)	4/29/1999 2:08:00 PM
From: Ken	Read Replies (1) \| Respond to of 19700

A stock is not a pie. A pie is limited. Each time it is divided, each piece gets smaller but the whole amount is unchanged. BEFORE A 2:1 PIE SPLIT You have a whole pie AFTER A 2:1 PIE SPLIT Doesn't make sense, you can't make another pie from nothing. A stock is a figment of our accounting imagination (Let's use a simple 2:1 split to illustrate): A stock is unlimited. Each time it is divided, it remains a whole share of stock and the WHOLE AMOUNT IS DOUBLED. However, it's value is HALF what it was. In effect, NOTHING has changed! BEFORE A 2:1 STOCK SPLIT you have 100 shares at $50 each with a total value of $5000 AFTER A 2:1 STOCK SPLIT The number of shares in the market has magically doubled (from thin air!), with the value of each share cut in half. you have 200 shares at $25 each with a total value of $5000 the total value remains the same. Now, there are two general reasons to do stock splits (of course there are more, but these are the top two): 1. To make the stock more affordable for individual investors. IMHO, this used to be a crock because institutions did all the trading and they couldn't care less if they paid $50 or $5000 per share if they had $500mil to spend. These days, internet stocks especially, are traded more by individuals. Making the stock affordable is important. 2. To increase ownership in the company -- a safety factor for a company to avoid being taken over -- if each shareholder owns a tiny, tiny piece of the company, chances are slim they could get together and take over control. Also, as with your example with DCLK, you must be VERY careful to compare ALL results either on a pre-split basis or a post-split basis. It makes no sense to compare a pre-split result with a post-split result.

To: DJ Oglesby who wrote (7753)	4/29/1999 2:41:00 PM
From: freeus	Respond to of 19700

I dont know if its still true, stock investing seems to have changed especially internet stocks the last couple of years. But generally a company will refrain from splitting the stock if the new eps based on the new number of shares will not stay around the same or even go up a little. eps is still important...except when you are amazon and want to "keep your loss" (Strange concept to me). Freeus

To: DJ Oglesby who wrote (7753)	4/29/1999 2:41:00 PM
From: freeus	Respond to of 19700

I dont know if its still true, stock investing seems to have changed especially internet stocks the last couple of years. But generally a company will refrain from splitting the stock if the new eps based on the new number of shares will not stay around the same or even go up a little. eps is still important...except when you are amazon and want to keep making a loss (Strange concept to me). Freeus

To: DJ Oglesby who wrote (7753)	4/29/1999 3:30:00 PM
From: Mark Peterson CPA	Read Replies (1) \| Respond to of 19700

DJO, don't know if I'm addressing the right question, but when a stock split occurs, it's true your piece of pie is halved, but they make up for it by giving you a second piece, effectively making you whole, again. Where before you had one piece of pie worth 10 cents, now you have two pieces, each worth 5 cents, effectively the same value before the split. Institutions generally like to see more than 46M shares outstanding before they really lay into a stock and buy it for their portfolios. Some institutions have restrictions on investing in stocks with fewer than 100M shares outstanding, 400M shares outstanding, etc. Hope this helps, Mark A. Peterson