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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: voop who wrote (1527)	12/4/1999 2:15:00 PM
From: akmike	Read Replies (1) \| Respond to of 2702

A secondary offering hopefully isn't in the cards very soon as it appears the company has little need for cash to sustain the business plan and issuing more stock would be dilutive of the growth rate which will be the primary driver of an increasing share price over the next few years. One of the large attractions of VARL to me is that they have the capacity to grow revenues significantly (more than 13 times) without an apparent need for outside financing. If they go very far down this growth path and need to raise capital to diversify into another product line or whatever, then they will raise capital much more cheaply than today. Best regards, Mike

To: voop who wrote (1527)	12/4/1999 2:47:00 PM
From: Bosco	Respond to of 2702

Hi all - re: secondary offering, personally, I am not concerned if it comes from the company itself for business expansion purposes. While it is better to see internal growth powered by free cash flow, VARL is not big enough to behave like a conglomerate. OTOH, I would look at the secondary offering with utmost suspicion if it is not from the company but from the shareholders. The latter case provides no benefit whatsoever except implicitly suggesting some insiders wanted out. Also, personally, I agree with Robert as far as stock split is concerned. Before the stock split craze got hold of people's imagination, it has not particular value except an attempt to improve liquidity. If VARL hits a hundred, let say <G>, then it may have some impact. Otherwise, technically, capitalization, equities etc are the same. best, Bosco

To: voop who wrote (1527)	12/5/1999 2:25:00 AM
From: Robert Sheldon	Respond to of 2702

What about a secondary offering to increase the float in lieu of a split? See post #1535 Also, I assume you have no opinion on the next question but what do you think from a technical aspect of this stock with no splits finally breaks out after three years of trading between 8 and 15? There are those who might suggest this is indicative of an explosive upside. I do have an opinion! If a stock trades sideways for several years while earnings and shareholder equity continues to rapidly increase it really does set the stage for an explosive upside. First, a revaluation takes place at some point that moves the stock to some middle ground valuation in relation to its industry. We just saw that. Next additional investors are attracted to a stock, due to the huge move, and drive the price higher. That is JUST starting to occur. Next folks wait with baited breath for a spectacular earnings report to verify that the stock should really be trading at the observed levels. After this occurs it is then off to the races. Now, there are a bevy of psychological things that occur and intertwine throughout this process (see the Soros book for a primer – it is really worth the agonizing read). I am not going to try to explain them, only note that all sorts of very interesting things can happen from this point foreword. So, in my view it is not really technical analysis of a stock, but human nature we are observing, and imputing into a stock's performance/life.