Synergy Brands-SYBR (was KRAN) Message Board

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Microcap & Penny Stocks : Synergy Brands-SYBR (was KRAN)

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To: Jim Spitz who wrote (715)	4/14/1998 11:46:00 PM
From: Ajay	Read Replies (1) of 1026

I think you got it wrong - maybe I can clarify. Obviously, issuing stock is dilutive - especially when the stock is undervalued - it's like giving away the assets (almost). You should only issue stock when you feel the price of your stock is 'over-valued', look at all the internet co.s issue more stock - they are going to get more money for their shares. Debt does have more benefit (btw, it's NOT viewed as a hard asset) - interest expense is a tax shield that can save the company money. Companies would prefer to issue debt - but they do have to worry about liquidity issues. In Kran's case, no one would have given them a loan because they consider the co. insolvent adn that's why the co. had no option but to issue shares to raise money for working capital. This is why the recent news is GOOD news for shareholders. Hope this helps.

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