Great Southern stock slips after Nasdaq opening

The Springfield-based banking institution has seen the price of its stock, which closed Dec. 2 at $42.60 per share, drop $7 per share, almost 20 percent, in the last four weeks. It closed Jan. 5 at $35.10 per share.

Great Southern officials aren’t panicking. Matthew Snyder, director of human resources for the bank, said there is an explanation for the quirk, and it’s not due to a curse of the Nasdaq.

“We have a lot of institutional investors,” Snyder said. “I think what you see a lot at the end of the year is those institutional investors are having to readjust their portfolios, and they may have an overabundance of bank stocks. Because we’re a smaller bank, they’ll dump us before they dump a Bank of America or a Commerce Bank, and if you have a sudden surge of transactions on our stock, since it’s so thinly traded, it drops the price.” Great Southern stock, which averages about 13,000 shares traded daily, has seen average trading of nearly 21,000 shares a day since Dec. 3.

Snyder said that from a historical perspective, the price drop is not something to be too worried about.

“If you look back historically at our stock, you’ll see at the end of the year it does drop a little,” he said. “And a lot of times at the end of the first quarter, it’ll usually pick up again, and that’s when investors probably have a little bit of excess cash. They go back and they realize that our stock’s actually trading at a pretty good (price-to-earnings) ratio, and that drives the price back up.”

He added that most of the company’s other financial numbers – like dividends, up 9 percent in fourth quarter 2004, and quarterly earnings, up 51 cents a share in the third quarter – indicate continued positive growth.

Monett-based Jack Henry & Associates experienced the same phenomenon when officials opened the Nasdaq Nov. 8, 2001, to celebrate 15 years of trading on the market. Its stock dropped nearly 24 percent – from $25.20 per share at the end of trading Nov. 7 to $19.20 a share at the end of the day Dec. 21, 2001. More recently, it closed Jan. 5 at $20.29 per share.

Jon Seegert, Jack Henry’s director of investor relations, said the explanations for the drop have nothing to do with the company’s opening the Nasdaq.

“Right after the opening we were in critical times with the economic struggle of 9-11, and I think that had to do with what banks perceived was the future at the time,” Seegert said. “When 9-11 hit, there was a tremendous concern about the outcome of our economy at that time. People just wanted to wait and see what would happen next.”

Most companies don’t see a negative impact from opening the market. Decorize Inc. opened the American Stock Exchange April 3, 2002 and saw no significant change in the price of its stock.

Timothy Willi, an analyst with A.G. Edwards & Sons Inc. in St. Louis, said he can’t see how the drop in stock prices could be related to opening the market.

“It’s either purely coincidence or something was going on at those companies long before they opened the Nasdaq,” he said. “There’s nothing about opening the Nasdaq that would make people sell your stock. I’m pretty sure of that.”

Snyder agrees that there is not a curse of the Nasdaq.

“We hope not,” he said, “because it had been 15 years since we’d gone, and we may not go back if that’s what’s going to happen.”