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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Codfish who wrote (4697)	4/7/1999 2:59:00 PM
From: bob	Read Replies (2) \| Respond to of 10309

Interesting speculation from the Yahoo board: mgt chickening on stock buyback? by: techstockfool 1508 of 1510 Everyone who is long on this thread is desperately holding on to the belief that the stock is at a fire-sale price. The question is, if management agrees that this is a fire-sale price, why not announce a stock buyback? WIND has about $100m free cash, and is expected to generate another $30m cash in 1999. At the current price the company can spend $110m and buy back 8m shares. That would bump the EPS to $1. So why hasn't the mgt acted? I can think of 4 possible reasons: 1. Q1 bookings are coming in behind plan, and even with a supposedly large backlog, the management is not confident enough to use the backlog to make sure that the earnings projection is met; so the mgt is occupied by execution and can't worry about stock buyback. 2. The mgt is older and conservative. The company went out and raised $140m convertible loan when they planned to build a new campus. It is just not in the top management's nature not to have $100m sitting in the bank doing nothing even if the projections are very rosy. 3. The company is expecting or wants to be acquired. A major stock buyback may affect the company's ability to merge thru a pooling of interest. Based on the price action of the stock, this possibility is highly unlikely, and may just be a fervent wish on the mgt's part. 4. The company is looking to make a major acquisition such as buying INTS. Again stock buyback will affect the ability to use pooling of interest. This is possible. Insiders sold at the beginning of the year. Maybe somehow large shareholders got wind and decided to pass, dumping the stock in expectation.