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Technology Stocks : Wind River going up, up, up!
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To: Peter Church who wrote (9465)4/6/2001 4:53:48 PM
From: Allen Benn  Read Replies (1) of 10309
 
Does anyone know why the company would not say how much they paid for their two new acquisitions? Is there no requirement for disclosure to us?

I think they did say. They said it wasn’t material, and certainly there is no requirement to disclose anything non-material.

What this means to me is that WIND was able to make a important strategic acquisitions at what had to be incredibly cheap prices – no doubt the major reason for not wanting to make the numbers public.

When times are tough, second tier companies struggle more than market leaders. While there is always a significant spread in the market caps of leaders and minor players, the spread expands dramatically in down markets. This provides an inexpensive means for strong companies with cash to extend their leading market positions.

I had been thinking recently about the wisdom of WIND buying back its own stock at give-away prices. I realized that, as cheap as WIND’s stock is today, there are other opportunities, like the technologies just purchased, which are even cheaper in today’s market. These kinds of purchases are optimal in this economy.

If there was nothing worthwhile for WIND to buy, then and only then should WIND buy back its own stock. Under most circumstances, cash should not be spent beyond some minimal comfort level.

Allen
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