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Technology Stocks : Novellus -- Ignore unavailable to you. Want to Upgrade?

To: Dave Chanoux who wrote (2362)	9/2/1999 1:38:00 PM
From: Carl R.	Respond to of 3813

Actually I disagree. With tech companies trading at PEs of 30-40 the earnings from the cash are nearly the same as the earnings on the previous shares, and therefore the secondary does not significantly dilute current earnings. In the case of very high PE stocks (or internuts with losses) the secondary can actually be currently accretive. The problem is that the cash by itself has no potential for earnings growth, and if just kept around as a cushion, can be significantly dilatory as to future earnings. To avoid that, the company doing the secondary needs to have good expansion opportunities (for example, acquisitions) where they can put the money to good use. Carl