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To: DJ Oglesby who wrote (7762)4/29/1999 2:34:00 PM
From: DiB  Read Replies (1) | Respond to of 19700
 
DJ,
you are correct, sir. More shares issued mean dillution of your piece of the company.



To: DJ Oglesby who wrote (7762)4/29/1999 3:54:00 PM
From: Ken  Read Replies (2) | Respond to of 19700
 
>> I've never understood why they often cause share prices to spike.

Yeah. It really has gotten crazy. I guess its more a matter of mass psychology than anything else because a split does not increase or decrease the value of a company. However, a split announcement drives prices higher, which in effect increases the value of a company.

Crazy.

And I am "split" on the analogy :) I find it vague to compare the division of a physical entity of which there is limited supply (cutting a pie) to an accounting activity (splitting a stock). By splitting, a company is overcoming the "limited" supply aspect of reality (I realize there is a new "limited" supply, but a stock can split infinitely, in theory)