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Technology Stocks : Wind River going up, up, up!
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To: Mark Brophy who wrote (901)4/22/1997 1:19:00 AM
From: mac   of 10309
 
>If you really believe Wind River is undervalued, send an email message to Jerry
> Fiddler and ask him to use the huge pile of cash ($64m - $2.27/share) to buy back
> shares. If he takes your advice, you'll know that management also believes the
> shares are undervalued. A $32m buyback program would retire a whopping 6% of
> the shares, assuming their buying activity doesn't raise the price above 19 3/4.

You seem to imply that if WIND buys back the shares then they consider
then undervalued, and if they dont buy them back, they don't.
It just is not that simple.

If a company buys back stock it could mean either:
1. that the shares are considered undervalued...
2. management is lazy or incompetent or lost and finds nothing with a better rate of return than their own stock, i.e., further product development etc.
3. *any* combination of the above.

> shares, to purchase other companies, instead of using the cash to repurchase shares (...)
> So, even the founder of the company agrees
> with my assessment that the shares are overvalued.

Thats an absolute non-sequitur. Couldn't he possibly believe that
it's more important to make a strategic acquisition than buy
his own stock.. no matter what his opinion of that stock? Even if
he was only following the sound practice of diversification, of
course he could.

regards

mac
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