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Technology Stocks : Veeco Instruments-Who?
VECO 28.75-1.4%Oct 31 9:30 AM EDT

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To: Zeev Hed who wrote (2970)11/21/2002 10:51:14 AM
From: Robert Douglas  Read Replies (1) of 3069
 
Zeev. I don't think there's any way you can combine two companies (via stock exchange, not cash purchase)with positive book values and create an entity with a negative book value. All you can do is switch wealth from one group of shareholders to another.

Example:

Company A: $100 million in equity.

Company B: $0 in equity.

Suppose company A doubles its shares to acquire company B. The shareholder's equity for the new company is still the same but it is divided over twice as many shares. The shareholders of company B have seen their equity/share increase, while the shareholders of company A have seen it halved.
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