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Gerdau S.A. Message Board

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  • loftyroe loftyroe Jun 21, 2008 6:49 PM Flag

    Why the 6% Drop

    Nue, MTL, RIO were all down 2-3% PLUS. The market was down 200 points. The split probably did confuse and scare some sellers. There is no dilution in a split. Its worth half as much but you have twice as many shares now. The float is unchanged. The price of steel is going up fast. The recovery will be soon and upward from there. You are so right that the fundamentals are OK. It really would be a good dip to add more shares as this drop has no long term foundation.

    • The split is dilutive. More shares with the same earnings spread more thinly.

      Hope it doesn't tank, but at this point I'm playing with the house's money.

      Splits are dilutive unless and until the company is able to use the influx of capital to grow earnings--IF they can. Period.

 
GGB
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