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Author: madmarv Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46827  
Subject: Re: Stock Split Date: 10/17/2004 3:58 PM
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The company wants to increase the number of authorized shares from 30 million to 60 million and has filed a Form Pre 14A. Someone characterized this as a 2-1 stock split, but I'm not so sure.

It is a preliminary step the company has to take before they can do another stock split. The authorized number of shares has to be increased before any additional shares can be issued for any purpose. Once the authorization is approved, then the company may issue new shares up to the newly authorized limit. It is possible that the company may be planning an acquisition by stock swap or it may need more shares for stock options. However, the size of the increase leaves little doubt as to the most likely reason.

Having never read one of these forms, what exactly is the company trying to do here (aside from increasing the number of shares available, obviously)? Is this good or bad? Thanks for any light you can shed.

Was this proposal included in the company's annual proxy statement or was it the subject of a special meeting of shareholders? Normally, this kind of housekeeping item is something they do way ahead of when they expect to use it so that they have elbow room in the future. If this proposal was introduced separately, it may be significant.

Marv
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