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Technology Stocks : ICOM: Investment Discussion
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To: Dan Kelly who wrote (182)7/1/1998 10:30:00 PM
From: RumbleFish   of 494
 
<<You forget that the company received $5 million upon issuance and this will only be
dilutive if the company does not make good use of the money. But time will tell so
go ahead and short the stock and we'll see what happens>>

Dan,

In return for the five mil the company is required to issue the new shares. So the dilution will occur.

Generally, companies that do this kind of financing are desperate for money and need the financing to stay alive. From that perspective perhaps management is just doing what they have to do.

However, it is very abusive of shareholders, especially when the company is as evasive of the truth as ICOM was in their pr yesterday.

There is no sure thing in the stock market (well, other than insider trading). But a dramatic fall in stock price for companies engaged in this kind of financing has a high degree of probability.

Time will show who is right or wrong. Good luck.
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