Yes, there is a possible big dilution that could take place if they did the wrong thing with those shares. Instead, it looks like they want to build up shares for another string of mergers. They've had time to digest some of their recent companies, the business is going well and now they probably see opportunity to add additional product lines.
Anyway, the news is at least 10 days old and that wouldn't have caused today's slide. I believe the market was feeling some irrational desire to lump ESIO together with TER and their customer KLIC. The fact that KLIC contributes a small portion of business does not tell me any big reason for concern.
It was ugly, downright ugly and this was before the market even opened... Negative news from two highly visible tech stocks set the stage for a decidedly bearish start... In the semiconductor sector Kulicke & Soffa (KLIC -5 1/2), stated that there will be customer order deferrals and push-outs which could negatively impact its financial performance for the current quarter and its first fiscal quarter of 2001... They also hoped that investors would not overreact to the news... Not likely...
I bought some Aug 45 calls today. They filled me at 7/8 and then decided to readjust them up despite the fact that the underlying share price fell. Eventually, it fell even more, from 38 1/2 when I bought, but the options pretty well held their base. Don;t know if buyers will jump in tomorrow as they often do or not, but I wonder if ESIO will follow the pattern and base here in the mid 30'2 only to rise quickly back into the 40's in the next week? I guess it's a question of market sentiment.
The news that they might not get their patent case is not good, but again would it warrant the decline? Funny thing is I should have taken the same step with other companies and then I'd have gotten my great one day gain. ESIO went down and stayed down.
Regards,
Mark |
