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Technology Stocks : Cascade Communications (CSCC)

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To: Teddy who wrote (3397)4/6/1997 4:14:00 PM
From: Glenn D. Rudolph   of 3743
 
those shares come from? THEY HAVE TO INCREASE THE NUMBER OF SHARES
OUTSTANDING, right? If they issue 33% more shares it will decrease the
earnings per share by 33% (or some equally substancial amount). The
result will be that Assend's PE (which now exceeds its growth rate)would
be dd while the projected growth rate is still less than 50%.
I guess what i am trying to say is that wouldn't it make more sense to
sell CSCC about now and buy the new ASND after it takes a 33% drop?
(Same goes for 3com and USRX)


Edward,

I have not looked over the entire thread. Been away. However, if this has not been answerd, you did not take into account the earnings of CSCC that will be added to the entire earnings of ASND. Thus, there will be no major dilution in earnings per share. There will be more shares but there will be more earnings.

Glenn
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