"Dilutive financing or not?
Once again, Bill, you have mesmerized us with your witty, dialogue-driven banter and demonstration of a complete lack of accounting principles.
A financing can dilute EPS and/or Book Value. Since book value is somewhere less than $1.00, issuing shares at almost $9.00 actually increases book value for all the outstanding shares.
I will let our paid shill, Westergaard, respond on the earnings dilution issue --
"Warehousing $15mm of non-dilutive equity provides management with the flexibility to capitalize on acquisition or other opportunities that might arise, not to mention demand for capital associated with the substantial growth WBN envisages for IDX as its biometric systems replace passwords to become the ubiquitous "linqua franca" of ecommerce.
The financing is non-dilutive in that the $8.53 received for each share issued, if placed in 30 year Treasuries at 6%, would generate $0.51 EPS (non- taxed) which exceeds the $0.35 consensus estimate (non-taxed) for the current six day old FYJun00.
That's Westergaard's simple down home formula for calculating earnings dilution -- do new shares contribute earnings to previously outstanding shares (anti-dilutive) or do they borrow from them (dilutive)???"
If the $15 million financing helps to accelerate projected earnings or keep them from slipping they are worth more to current shareholders than the 6% Treasury return.
Also, how much is newly initiated coverage from CS First Boston and an opinion update from H&Q worth? I hope a lot more than $900,000! |
