David, the dilution is not that catastrophic, the debentures are about a billion bucks at around $67, so it is about 15 MM shares on top of the current 270 MM shares, or less than 20% dilution. The important thing, IMHO, is after the forced conversion, there will be nothing to hold the stock up, so our friendly bears on this thread should be able to finally short the issue. I would guess that once we get through day 10 in the count, shorting in the $110 to $120 area would be "beneficial".
If I were Appelton, I would chose the next SOX rally to issue an additional 10 to 15 MM shares here around $100/share (in the form of convertible debt, possibly) raising another $1 to $1.5 B to fund the Lehi facility. Of course, that would add to world wide capacity, but that he what he needs to do in face of the determination of the competitors to dominate the market.
Zeev |
