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Technology Stocks : Wind River going up, up, up!
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To: GuinnessGuy who wrote (1713)8/18/1997 11:37:00 AM
From: Ramsey Su   of 10309
 
Craig, I will try to take a stab in alleviating your concerns about the offering.

First, WIND needs money because software engineers do not grow on trees. I read an opinion from an economist (I believe from Stanford whose name I forgot) about the new measurements for productivity. Unlike the old days of assembly lines where the incremental cost of producing each addition unit of a product, such as cars, is directed related to revenue, the new industrial production is completely different. I think he used MSFT specifically as an example. Huge amounts are invested in the beginning of a product cycle while the incremental cost of producing an extra copy of W95 or Office 97 is neglibible. WIND is at a stage where they must expand huge amounts into the next generation products while receiving no revenue in the mean time.

How are they going to raise the money? If you look at the alternatives available for a company like WIND, you may find Reg S to be an attractive avenue. Consider the tradition alternative is to issue more stocks, thereby diluting the shares of the current shareholders immediately.

I think Reg S does have a stigma but the prudent investor should probably look at its utilization on a case by case basis and not jump to stereotypical conclusions.

Ramsey
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