Oakley Announces 2-1 Stock Split

Oakley Inc., the high-end sunglasses manufacturer, on Wednesday declared a 2-for-1 stock split effective Oct. 10, a move that analysts said was designed to keep the high-flying stock attractive to individual investors.

While Oakley’s stock fell $2.50 to $46.50 in New York Stock Exchange trading, industry analysts suggested that the split won’t have a long-term negative impact on Oakley’s stock price.

Linda Killean, who tracks new stock issues for Renaissance Capital Corp. in Greenwich, Conn., linked Wednesday’s drop to “profit taking after Tuesday, when the stock was up $4. I don’t think [the] drop had anything to do with the split.”

Analysts said that hot, young companies often resort to stock splits to keep the prices attractive to younger investors. Netscape, for example, announced a stock split in November after the Internet software maker’s stock price tripled in value.

“I’m guessing that was the case here,” said Killean, referring to Oakley’s move. “They probably feel more comfortable with their prices at about $20 or $30 rather than $50.”

Sometimes, stock splits can have a negative effect on prices because of “the volatility surrounding these new issues,” said Arnold Kaufman, editor of Standard & Poor’s Outlook investment newsletter in New York. “I don’t know that it would happen here, though.”

Each Oakley shareholder of record on Sept. 25 will receive an additional share of common stock. The company now has 35.7 million shares outstanding.

Oakley, which surged $4 a share to $27.125 in its first day of trading in August 1995, hit a high of $54.375 on May 24.

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Oakley Fortune

Oakley Inc., stock closed on its first day of trading last August at $27.125 per share and doubled to a high of $54.375 on May 24. It has recently traded in the $40-$49 range. Monthly closing prices:

1996: Wednesday’s close: $46.50

Bloomberg Business News, Dow Jones Information Service