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Technology Stocks : Applied Magnetics Corp -- Ignore unavailable to you. Want to Upgrade?

To: Jonathan Bird who wrote (11087)	12/20/1997 8:26:00 AM
From: Jonathan Bird	Respond to of 12298

The only way that APM is going to be able to stay liquid(not run out of opperating capital) this year AND complete the planned and absoluelty cruicial 170 mil expansion is if either they earn at least 2 dollars a share(diluted, 62 mil dol), or offer more shares, bonds or debentitures. OK I was exagerating. I guess they could scrape by with 1 dollar a share.:) But thats still 100+ million less cushin then they have now. Jon Bird

To: Jonathan Bird who wrote (11087)	12/20/1997 4:01:00 PM
From: Mark Adams	Read Replies (1) \| Respond to of 12298

Keep in mind that Cash Flow and Profit are different. Cash Flow is usually much higher, due to depreciation of existing facilities. So financing upgrades via revenue isn't so far fetched. I agree with most of your explanations. I'd add that companies can show better return on equity by carrying some level of debt, and thats likely the reason APM is rolling over credit facilities. Hey, < 6% interest cost? It is true that carrying this type of leverage too far can lead to cash flow problems if loans are called, but it doesn't appear to me that this is the case here. However, in Korea, with debt 3x equity, it may be. Just some thoughts- and thanks for your efforts, Jon, Don and T Bowl.