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Technology Stocks : Novellus
NVLS 2.400+2.1%Jul 24 5:00 PM EST
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To: Math Junkie who wrote (1933)2/25/1999 3:42:00 PM
From: Duker  Read Replies (1) of 3813
 
Classically: Issuing stock below book value is dilutive to existing shareholders. This is clearly not being issued below book value, so it is not dilutive to existing holders (obviously, the new holders get diluted ... someone loses, someone wins ... and the bankers always do well ...).

Now, could Ricky Hill run out and make a dilutive acquisition (dilutive to earnings versus the more classic form of dilution mentioned above), yes ... of course.

However, he would really have to overpay or buy something that is not producing any earnings now (e.g., LRCX or CFMT) ... because one would assume that he would use stock to transact such an acquisition ... which would make it very difficult to be earnings dilutive given the multiple applied (no pun) to NVLS stock ... so tough putt ... unless really overpays or buys a LRCX/CFMT-type company ... but, then there are always the synergies!!!

Isn't it all so clear?

Please, explain it to me.

--Duker
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