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Re: eztradin post# 127

Monday, 01/17/2005 5:17:04 PM

Monday, January 17, 2005 5:17:04 PM

Post# of 15765
Forward Split Question then:
Why does this cause a dilution?
In a forward split, everyone who holds shares receives more, and the stock price is adjusted down accordingly, so the net effect is nothing. They value of my holdings does not change, I just now have 5 times as many shares. VS say a S-8 where new shares are registered, and sold into the market, since share price is not adjusted for a S-8, price has to drop as more shares hit the market.

So you are saying that after the split people or the company are selling some of their post split shares into the market then ?

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