G'day all - hi Chris, you sez "Anyway, I don't see how adding 3m shares is a positive for share holders - though it is better than borrowing I guess."
I used to worry about that too [re: share dilution,] but countless cases in the past 4 years have changed my mind. The true of the matter is that except for really strong companies who can tap into the power of free cash flow, most of them need to raise funds for expansion. Big cos have the leverage of floating high grade commercial papers, but for the small ones, like you have implied, issuing equity is still the least of all evil. I probably can stomach revolving credit borrowing. However, I would not have taken a position in TLCM if she were to issue prefers!
To backtrack, how a co deploys the new capital is another matter. I believe TLCM is on the verge of hitting the big time. To compete, she does need it. Incidentally, years ago, I did not buy into VTSS b/c it did a secondary. Well, after its stock has increased by 5 to 10 folds, I guess the joke is on me <G>
best. Bosco |
