Forum Archive Index - October 2001

["Viewpoint ." <viewpoint_@hotmail.com>]

There has been some speculation that Sky City Entertainment might announce a 
share split at their forthcoming AGM.

There was some discussion some months ago on this forum giving the reasoning 
why Sky City Entertainment should do this - essentially New Zealander's do 
not find 'expensive' shares attractive and a lower priced share price would 
make them more attractive to the average investor.

Popular opinion is that if Sky City Entertainment split their shares that a 
2 for 1 split (ie get 2 for every 1 held) would be the way to go.

I put it to you that in view of the New Zealander's penchant for 'cheap' 
things that a 10 for 1 split (ie 10 for every 1 held) would be a better 
proposition. At the current price of around $12 the investor would get 10 
shares at $1.20.

New Zealander's penchant for 'cheap' things is highlighted in many ways. 
Look at the increasing market share of The Warehouse where 'everybody gets a 
bargain'. Our exporters thrive on a 'cheap' (devalued) New Zealand currency. 
There was unprecendented demand (can I buy them on my credit card mentality) 
for Air New Zealand shares when they became 'cheap'. Doing things on the 
'cheap', as a matter of neccesity in many cases, is embedded in the New 
Zealand culture.

Therefore if you think that Sky City Entertainment shares will be more 
attractive to the investor at $6.00 surely they are even more attractive at 
a 'cheaper' $1.20.

Isn't the hope, in wanting for a share split, that a 'cheaper' price will 
drive the share price up and make us all richer. In that case I say that a 
$1.20 Sky City Entertainment share price will reward us better.





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