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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (6724)	8/24/1999 2:38:00 PM
From: Sam	Read Replies (1) \| Respond to of 60323

Aus, These underwriters get a fee for placing the stock for Sandisk. That, indeed, is the biggest point of the stock market: to get money for companies that need it and don't want to go into debt by creating a marketplace for equity. Plus the underwriters get a double fee: If their clients just bought the stock in the open market, they would just get commissions on the buy. This way, they get both commissions on the buy and a piece of Sandisk's financial windfall. Sandisk gets more cash, underwriters get fees and commissions, their clients get risk, and the current stockholders get diluted but have the hope/confidence that the company's management knows how to invest the money to make the business more than the dilution (otherwise, you should not own the stock). Hope that helps, Sam