From: Max More (maxmore@primenet.com)
Date: Mon Sep 15 1997 - 17:20:43 MDT
At 12:42 PM 9/15/97 -0700, Ray wrote:
>
>The phenomenon you mention is exactly why stocks tend to rise after they
>split: the split causes greater liquidity.
I doubt this. The increase in liquidity seems to me insufficient to explain
the extent of the common rise in price. However, I admit I don't have any
hard evidence.
A more plausible explanation for the post-split rise in stock price, it
seems to me, is that investors see the split as a sign of management's
confidence in future earnings.
Max
Max More, Ph.D.
more@extropy.org
http://www.primenet.com/~maxmore
President, Extropy Institute: exi-info@extropy.org, http://www.extropy.org
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