Eagle & Beagle
You know the steak that you buy at the store isn't going to look quite as delicious as the one in the advertisement, but the ad still makes you want a steak.
The Wall Street version of selling the sizzle is the reverse stock split. This week's eagle, Syntroleum Corp., managed to persuade some traders to buy some shares at an artificially inflated price.
The Tulsa company, which is seeking to commercialize its proprietary method of transforming things like animal fats to diesel fuel or jet fuel, completed a 1-for-10 stock split on April 11. The stock price moved from 38 cents a share to $3.80, although the underlying value was unchanged.
But last week, buyers pushed up the stock price an actual 7.3 percent. The shares closed Friday at $4.11.
Last week's gain, which saw SYMN shares trade as high as $4.69, represents legitimate optimism, including the possible resumption of activity at the plant the company jointly owns with Tyson Foods, a federal tax credit that benefits the firm and the general sense that synthetic fuels at some point will be commercially feasible.
There is some steak with this sizzle.
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