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.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (37907)	4/15/1998 10:30:00 AM
From: SecularBull	Respond to of 176387

In any event, it's not a sign of weakness, no matter what Jim P. wishes.

To: Lee who wrote (37907)	4/15/1998 1:13:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

You're on target Lee, but there are some other considerations too. If you want to expand your capital base you have two choices: equity or debt. The choice of debt indicates that you believe that your stock is undervalued. That's why I always view it as a potential negative when companies merge using stock rather than cash. A second point is that there has been some debate among financial academics about optimal debt levels. According to the so-called Proposition #1, the ratio of debt to equity is irrelevant to share value. According to other studies, there is an optimal amount of debt for a company to carry (generally thought to be a D/E of around .3). The current trend among technology companies is to avoid debt, but I think that may change because it gives a company a lot of operating leverage. TTFN, CTC