Summit Technology (BEAM) Message Board

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Biotech / Medical : Summit Technology (BEAM)

BEAM 22.75

-6.3%

3:59 PM EST

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To: Ken W who wrote (1317)	8/8/1999 11:43:00 PM
From: Carl R.	Read Replies (1) of 1386

Secondaries can mean that a company is in trouble, cash wise. They could also be necessary in the case of an aggressive expansion program. They can also be for the purpose of building a cash hoard for acquisitions, especially if the industry is cyclical - in which case they may try to load up on cash during the peaks so they can buy up others during the valleys. As for dilution, if the company is losing money or trading at a very high PE the secondary could be accretive if the earnings on the cash (or savings in debt interest payments) are more that the earnings on the stock. Personally my observation is that most of the time the stock falls during the secondary and for awhile thereafter. Carl

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