Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 301.15

-1.2%

Dec 31 4:00 PM EST

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To: Donald Wennerstrom who wrote (18007)	8/11/2004 10:06:49 PM
From: Sarmad Y. Hermiz	Read Replies (3) of 95657

Don, Forget about analysts for now. I want to know why companies are not buying other companies for cash ? Corporations have $550 b on their balance sheets. And valuations are low in terms of earnings yield. Yet companies prefer to earn 2% on their cash balance, instead of buying one of their competitors for a return of 7%, 8%, or even 12%. I would expect the resulting competitive consolidation to result in higher profits for the acquiring company. Yet it isn't happening now. Nor did it happen in '02, when prices were even lower. Sarmad

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