This part is interesting:
Since cash would truly seem to be king these days, the question investors are asking is, which companies will be able to raise money in this market?
According to CIBC World Markets analyst Barry Richards, there is an ample supply of cash-strapped candidates from which to pick.
Of the approximately 50 companies that make up the Canadian wireless sector, Mr. Richards estimated that 35 have less than $10-million in cash and, of those, 20 have less than $2-million and four are essentially broke.
Faced with such dismal cash positions, he is surprised that, as of yet, none of these companies have filed for bankruptcy.
"These companies are more resilient than we give them credit for, they seem to be able to scrape by on fumes, which is a remarkable skill," said Mr. Richards.
Still, eventually these wireless companies will need to raise money, an unappealing prospect given the market's current appetite for conservative income-oriented products, such as preferred shares and IPOs for income trusts.
Indeed, the pipeline of corporate financings going into 2002 is relatively light, said Wayne Adlam, managing director of equity capital markets at CIBC Wood Gundy. He said he hasn't had a lot of new corporate issues to put in front of traditional institutional investors."
One thing that is going to have to happen for the bull to continue is the sopping up of TONS of new stock offerings at some point.
DAK |
