Novellus Message Board - Msg: 8168105

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Technology Stocks : Novellus

NVLS 2.400

+2.1%

Jul 24 5:00 PM EST

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To: SemiBull who wrote (1988)	3/5/1999 11:24:00 AM
From: brushwud	Read Replies (3) of 3813

"Short-term depressive OR build cash" = less filling, tastes great. There does appear to be short-term depressive pressure due to a secondary offering. From a supply-demand perspective, this would be due to an increase in supply with no change in demand. And in a case where business is going well and the company sells shares, there usually would be dilution since the company's ROE would be better than bank interest and the company's P/E would be relatively nominal. In this case, the $255 million should earn around $10 million per year at the bank, or about $2.50 per new share, which is more than Novellus shares have earned for a while. So it's accretive, not dilutive, until EPS reaches that level, at which point the shares should easily be worth the offering price.

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