Asyst Technologies (ASYT) Good Value/Where is the Bottom? Message Board

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Technology Stocks : Asyst Technologies (ASYT) Good Value/Where is the Bottom?

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To: Q. who wrote (2030)	6/27/2001 7:28:22 PM
From: James Calladine	of 2313

WHY THE NEW CONVERT ISSUE? Interest rates are lower than they have been. Share prices are depressed. They may be attracted to getting the money at a low interest rate, putting a modestly low conversion price on the security and if they have a fairly early call date, get everybody to convert, rather than have to redeem, not too far down the road. This way they get to use the money however they need, probably never have to pay it back other than some interest, and it all comes off the back of the common shareholders. However, if the share price sharply rises anyway, the argument will be, the shareholders will never notice the dilution! Wouldn't you do the same if you thought the mathematics worked out? You could even argue that the shareholders are better off because of having the use of the money for capital expenditures, etc.--thus investing to make you more profits! However, the bond purchasers have a perfect hedge, and as soon as the price on the common rises high enough, they will short the shares, knowing that they are already covered by the conversion feature. All a good idea? You judge. Namaste! Jim

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