To: Jorjenzak (2391 )
From: Tradewinds Tech Wednesday, Jun 2 1999 2:29PM ET
Reply # of 2445
Jorjenzak wrote, " I wonder now if Tom intends to acquire new companies...with stock rather than cash? Any thoughts on the costs/benefits of doing that?".
Well, heck, even more basic than the stuff they taught me in B School, is the stuff that I learned working at my dads store/office on the south side of Chicago when I was 9 years old...and the applicable lesson in this case is, any time someone is willing to sell you something without demanding cash up front, and as long as there is no significant price change involved for the non-cash deal, RUN, do not walk, to the desk to sign the papers...
If I was Tom, I would authorize as many shares as the SEC would let me, and make as many of my purchases as possible with stock. In these cases, you can often "restrict" the stock, so that the sellers can't sell immediately, so the market doesn't get flooded. And in many cases, the sellers are also management, that you want to keep onboard and motivated; and stock is much better for that purpose than cash. People with a lot of cash in their bank account tend to lose focus. If I win the Lotto tonight, I ain't getting up early tomorrow.
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