OK - let's talk about splits. This is a more global assessment, for the purpose of education for any individual investors on the board (and not directed toward any individual stock or poster). My opinions:

1) It is a FACT that there is no financial impact to a stock that undergoes a split (regular or reverse). The total value of your holdings is identical after the split is announced, and when it actually takes place. THERE IS NO VALUE CREATED FROM A SPLIT.

2) Generally, a stock that has somewhat regular splits is likely to be a good company. Companies whose stock is stagnant are not likely to "need" splits to stay in a preferred trading range. Therefore, stock splits don't make companies great, but great companies often have stock splits.

3) The tangible positive effects of splits are mainly for individual investors, who can more efficiently trade options (i.e. covered calls) on the underlying stock if the price per share is lower. A holder of 50 shares can't write covered calls, while if a 2 for 1 split occurs, they can write calls on a position of 100 shares. It also can lead to more liquidity and availability of shares, which can enable better trade execution.

4) The tangible negative effects of splits are that lower stock prices can potentially allow more stock manipulation, since derivatives are relatively more accessible. Also, even a simple mechanical split does create some minor friction and expense to the company (and therefore the shareholder).

5. Reverse splits are pretty much the opposite argument of the above, and it is generally true that great companies don't have reverse stock splits (because their share value is usually increasing over time). Usually, if a company has repeated reverse stock splits (to maintain ability to trade on the NYSE or NASDAQ, for example), it's a flashing neon sign that indicates "stay away".

I know others have different opinions, so please chime in and tell me where I'm wrong!

I bleed maroon said:

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4) The tangible negative effects of splits are that lower stock prices can potentially allow more stock manipulation, since derivatives are relatively more accessible. Also, even a simple mechanical split does create some minor friction and expense to the company (and therefore the shareholder).

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Yes and no.

While a lower price means easier access to derivatives, a high price that is out of reach for the common investor leaves only institutional access to derivatives which I would argue opens it up to MORE manipulation, as there is no checks and balances from the sentiment of the regular investor/trader.

flashplayer said:

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What's the target on POWL for those of you who played it? Taking profits now or holding?

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I'm holding and I think it will go through $200, maybe not today, but soon.

ProgN said:

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flashplayer said:

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What's the target on POWL for those of you who played it? Taking profits now or holding?

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I'm holding and I think it will go through $200, maybe not today, but soon.

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$210-$220 if it gets a new high

Holding onto POWL as well. Should it have a big pullback, I'll add more shares

POWL is a solid gap fill short for the morning, you may get your pull back to close to yesterdays close.

Crude $77.50 - $78.50 is support. If yall remember my post from a couple weeks ago about the daily RSI sell signal I got, well, it's almost reset now and we are far above the $67 low which is great for oil bullish potential. If we can bottom in that range, Crude should target $90-$95 on next move up. Watching many O&G names as we move into support.

Texaggie7nine said:

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ProgN said:

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Texaggie7nine said:

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Doubled up on POWL this morning and went in on SMCI about as much as well. Maybe I'll break even tomorrow.

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Do not take a loss on SMCI, just weather the storm. Wall Street just pissy because they didn't declare a split. SMCI should've and their advisors they're listening to are f'ing morons, but I'll be adding more of it if it opens down $100

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So how much did you take? Guess I'll hodl.

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Bought my shares at $750. I'm not worried about SMCI at all.

The most important piece of reading. I strongly urge each of you to set aside some time and read this entire article, making sure you don't gloss over any part of it. It touches on the FED, banks, CRE, inflation, government debt, and everything in between.

Spring 2024 Situation Review by Daniel Amerman

This is literally a small excerpt. Like I said, set aside 30 mins and truly read every word of this.

Quote:

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As we will be reviewing in detail at the Spring 2024 workshop, when we look at #2 above, the balance sheets of the banking system, and we compare it to #4 above, the explosive growth in deficits - then we have a fundamental divergence. To keep $1 trillion in new debt funded every 100 days, and to do so at what are from a historical perspective still quite low interest rates, may require pulling a lot of new money from the balance sheets of the Fed and banks every 100 days. The problem is - that money isn't there, the banking system is in trouble.

Someone has to fund that new $1 trillion every 100 days. The less that the Fed and the banks can fund, the more that other market participants have to fund. What this meant before 2008, is that large increases in government debt required increases in interest rates to pull in more money. If this happens, it basically shatters the foundational premise of most markets today, which is that the Fed is in control of medium and long term interest rates.

This is another example of a model failure that is still in the early stages, and could get much worse at any time. The Fed in its hubris assumed that there would never be higher inflation, and therefore, there would never be higher interest rates. When the Fed's mistakes set off the inflation, and the Fed increased interest rates to try to contain the inflation, it simultaneously set off an interest payment spiral in the national debt, even while the same increase in interest rates created massive losses on the balance sheets of the Fed and banking system, which now limits the ability to fund the deficits. This then creates another potential point of failure for #1 above, which is the market damage resulting from the Fed potentially losing control of interest rates due to its inability to fund the fantastic rate of growth in the national debt.

What we have underway right now is a ticking clock. Unless there is A) a radical reduction in deficits; or B) a radical change in monetary creation that separates it from the balance sheets of the banking system; then at some point as a result of what is already underway, we will likely get C) a return to the historic norm of the interest rates for medium and long term government debt being set by the markets; which will likely lead to D) extraordinary losses in inflation-adjusted terms for many securities and most retirement accounts, as the last of Rational Bubble is popped with a return to long term average valuations.

To say that the current system will necessarily break may seem a bit hyperbolic - but, this is a good place to step back and look at history. For all of US financial history prior to 2008, we did not have an activist Federal Reserve using the deposits of the banking system (via banking reserves) to control medium and long term interest rates, while funding the national debt as it grew to unprecedented levels, while promising unlimited monetary creation to bail out markets as needed. We've been living inside an unprecedented aberration - a bizarrely different financial environment - that is showing multiple signs of breaking under strain. The "doomsday scenario" discussed is simply market forces bringing a return to the normal market environment that existed before 2008, something that most financial and economic authorities in the 20th century would have treated as not only possible but necessary and even inevitable.

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