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Technology Stocks : Cymer (CYMI)
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To: TideGlider who wrote (7161)10/29/1997 2:56:00 PM
From: Patient Engineer  Read Replies (1) of 25960
 
TideGlider, Re:"they could buy and then sell at their need"

Not true. They can buy if the board says they can buy. They can't sell on the open market without a registration with the SEC. For them to offer stock on the market would be fatal for the stock. It would indicate that management doesn't have confidense in their ability to generate positive cash flow.

For a development stage company like Cymer, the pros all look at cash flow and liquidity just as much as they look at earnings. Cymer looks good on the earnings front, but they are a black whole for cash. Some of this is unavoidable (the need to build capacity). Some is due to lack of discipline. If Cymer's receivables were 65 days instead of 90, then they could buy back 500K shares and still have the same amount of cash on hand that they have now. They could also think about acquisitions and lots of other strategies. I've made this point before, but I see Cymer's poor balance sheet as their biggest negative right now.
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