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

To: Dave who wrote (26304)	7/4/2004 4:54:30 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Dave, if I recall correctly, the secondary offering actually dropped the book value PER SHARE slightly. I use book value per share as a measure because it tracks changes in shareholder wealth, which to my mind is a better way to understand the value of this type of investment to the individual shareholder. In a fast growing business, a company that pays no dividends and plows all its earnings back into research and the building of new plants can not benefit its shareholders unless it can show it is building shareholder wealth. At some point, the intrinsic value of the company, as evidenced by its growth in book value per share and earnings per share, will be reflected in the market price for the stock. Art

To: Dave who wrote (26304)	7/5/2004 12:19:05 AM
From: pompsander	Read Replies (1) \| Respond to of 60323

Should not a secondary offering reduce book value on a per share basis? Perhaps I missed something in your explanation.

To: Dave who wrote (26304)	7/6/2004 9:50:40 PM
From: Sam	Read Replies (2) \| Respond to of 60323

Yes, well, while the change in book value was driven in good part by the secondary, they didn't raise the secondary just for yuks. A good deal of their cash will go to building their new plant with Toshiba. Then the book value won't be cash. But of course then you will likely say something like, well, their change in book value is for an outdated plant in an industry saturated with capacity. It seems to me that it just doesn't matter what they do, you will find a way to make it a negative. But to each his own. The market, for now, is on your side.