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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: LLCF who wrote (13379)1/13/2002 4:28:35 AM
From: GraceZ  Read Replies (2) of 74559
 
companies can use inflated expectations to issue new stock at inflated prices, and the resulting increase in earnings per share can go a long way to validate the inflated expectations.

I think I know what you are trying to say but the way it is written means something different from your intention.

This is what it says:

companies have unjustified high earning expectations
they use this to sell more stock at unjustified high prices
This causes a higher earnings per share (even though they diluted the stock in the above step)
and this is used to validate the high earnings expectations

What I ask you is, if the earnings expectations were unjustified how did they meet them even with the diluted stock? If they met them, why aren't they justified? How do high expectations, higher stock price, more shares give anyone higher earnings per share?

I think you missed a step you meant to include.
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