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Technology Stocks : RadiSys Corp

RSYS 1.720

+0.6%

Dec 11 4:00 PM EST

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To: dylan murphy who wrote (744)	6/22/1997 2:19:00 AM
From: D.J.Smyth	of 1472

dylan, acquiring companies with the issue of additional shares can prove problematic to current shareholders as it could lead to dilution of the current share price if the company purchased did not equal the value of the additional shares issued. so, each situtation would be different. if they picked up company X for $50 mill in shares, and that company's revenue for the previous year was $25 mill, then RSYS paid a premium for this company in hope of increasing revenue. the market could then discount the current share price of RSYS depending on how they viewed the purchase. But, the current share price movement of RSYS is the best indicator of any future acquisition of RSYS in which a premium was being paid as those "in the know" would be selling prior to the news in large volume. so far, RSYS has shown no downturn on large volume to indicate any such event. the upside, of course, is the acquisition of a great company at a discount which would be beneficial both to RSYS and the company being acquired relative to synergism. the mere request for authorization of increase in shares for potential acquisitions would not give alarm. RSYS obviously has some high hopes.

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