Regarding dilution via public offering. While quarterly earnings are negative (a loss), it really doesn't make much difference how much they are losing per share. Revenues, cost, and growth are the important numbers.
Also, offering 1.5 million shares increases the capitalization. AFFX is already valued over 1 Billion dollars...probably due to the hype that it got in the recent months.
I expect AFFX to correct in the near term. It is very overvalued considering its quarter to quarter growth in revenues is well lower than its % gain in stock price and Price/Sales.
I am looking to get in around mid to low 30s. November is usually a down month for many biotech stocks (at least in the past 15 years).
We'll see it rise in 1998 I'm sure. AFFX probably has big plans for its GeneChip...but it does face competition with alternative technologies such as the capillary tubing (which is fast and cheap)and Mass Spec. Capillary (I believe its developed by Molecular Dynamics) cuts reagent costs of running gels by 75% and the time is cut down to around an hour and a half. and no messy gels and gelplates.
Genechip is a pretty unique technology...unfortunately, cost is pretty damn high. we'll see how it goes. The good news is that genechip and capillary can be used for totally different things...so both technologies can co-exist without significant marketing competition...but that might be a ways away since companies have just started using them.
(i.e. capillary can be used for other kinds of bioassays; and Genechip can be directly applicable towards bioinformatics; Mass spec is widely used in many different disciplines: organic chem, industrial chem, engineering, biochem, medicine, etc.).
if I'm inaccurate in away, let me know...I've been out of touch for a while so I'm behind on the tech.
-JW |
