"It is easier to compete for financing against penny stocks than against IBM," Warren Kaplan says. That's how he explains one of the more unusual financing moves taken by an INC. 100 company in recent memory.

Kaplan, head of investor relations for Action Packets Inc., which claims to be the nation's largest supplier to museum, zoo, and aquarium gift shops, recently decided the company's stock was undervalued. Many companies feel that way, and the usual response is to buy back stock, launch an aggressive public-relations campaign, and do dog-and-pony shows for Wall Street.

Nothing so mundane would do for Action. To draw attention to itself, the Ocala, Fla., firm -- which just went public in 1984 -- split its stock 40 to one in October. Since large splits occur all the time, even among small companies, Action's decision is nothing to write home about -- except for one thing. The stock traded for about $3 a share before the split. With this starting price, it went for 7 1/2? after the split. It is the earliest and one of the largest splits regulatory and industry officials say they can recall.

Of course, everything is relative. Action recorded $87,000 in net income on sales of $3.8 million last year. Even at 7 1/2?, Action's stock is still trading at nearly 17 times trailing earnings.

Nonetheless, Kaplan believes increased sales and earnings this year, coupled with the split, will call more attention to the ignored stock. "We are a real company, with a solid track record," he says. "We should be a real blue chip in the penny-stock market."

If the idea works, Kaplan may try other forms of financing. One possibility: selling $5 company bonds.