Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Harold Engstrom who wrote (7745)	1/16/2003 4:22:21 PM
From: Jacob Snyder	Respond to of 52153

Well, yes, the stock price won't go up if you grow earnings but not EPS. I've crossed off many SiliconTech companies from my buylist (except as shorts), because the locked-in dilution from outstanding employee options, and their habit of paying for ongoing costs with stock, is going to put a hard ceiling on the stock price, no matter what happens to the company's earnings. Cisco, for example. Biotechs have this problem, too.

To: Harold Engstrom who wrote (7745)	1/16/2003 7:59:16 PM
From: Biomaven	Respond to of 52153

Are those earnings per share Yes they are. The number of shares out in the first tier companies has not grown dramatically. (AMGN is an exception because of their recent merger.) In fact AMGN has mostly repurchased more shares than have been issued in options. In general M&A has not been the source of the earnings growth in the past, nor is it the basis for the forecast earnings growth. Dilution from options only happens when the stock price increases. Sure there will be some of that - but I for one am happy to share the price increase with employees. Peter