Biotech Valuation Message Board

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Biotech / Medical : Biotech Valuation

CRSP 56.87

-2.3%

Dec 5 9:30 AM EST

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To: Harold Engstrom who wrote (4883)	11/6/2001 10:47:05 AM
From: aknahow	Read Replies (1) of 52153

There is a difference between reality and perception. Agree totally that strong finances are a real plus. Don't agree that the cash balances protect against dilution as they were obtained at the cost of dilution. Not a stretch at all. Energy companies that refused to play the game, in the late 70's, of chasing higher priced land and exploration deals, and instead built cash balances, found themselves perceived as incompetent. It will be the inability to deploy the cash that will be seen as weakness, not the cash itself. Looking for companies with large amounts of variable rate debt might provide more of an edge than seeking those with large cash balances. But even here, I don't think that either debt or cash will determine value but rather that it's, "the science stupid", that will determine how well a specific biotech company does. Unfortunately for me I have a total lack of ability to evaluate this area.

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