TSM vs. AMKR
Yes, at this time, TSM has higher profit margin, but AMKR is catching up.
As far as capital for more capacity and expansion, it should not be a problem when
1. AMKR price gets higher
2. The confidence is established
3. After the $207 million convertible notes are converted
At that time, AMKR may decide to make a secondary stock offering to acquire capital needed.
Dilution ? Look at TSM.
TSM has 1.21 billion shares outstanding and 665.2 million shares floating vs. AMKR's 118.3 million and 30 million shares. Less than 1/10 of TSM's!
We can see how much rooms are there for AMKR to grow.
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Clips from AMKR 10-K:
In May, 1998, we consummated our initial public offering of 35,250,000 shares of common stock and $207 million principal amount of convertible subordinated notes due May 1, 2003.
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The Company's convertible notes are convertible into the Company's common stock at $13.50 per share. As stated above, the Company intends to pay the face value of its convertible note obligation upon maturity, unless converted. If the market value of the Company's common stock were to increase above the conversion rate of $13.50 per share and investors were to decide to convert their investment in convertible debt to Company common stock, there would be no impact to future earnings of the Company, other than a reduction in interest expense (See Note 15 in "Notes to Consolidated Financial Statements").
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