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Technology Stocks : AboveNet Communications, Inc. (ABOV) -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (353)	4/8/1999 1:38:00 AM
From: MileHigh	Read Replies (1) \| Respond to of 835

Secondaries are dilutive to existing shareholders. Theoretically, if a company is worth $1B before a secondary and has 10M shares out your share price is $100. ($100 X 10M shares out gives you $1B market cap) Then a secondary for 4 million shares comes out and increases the shares out to 14M, theoretically the value of the company has not changed, therefore the new share price "should" drop to $71... 14M shares out divided by $1B market cap) Again, this is theory and is the reason why share prices drop on news of secondary offerings. Also, unless you buy 40% more shares than you currently own, then you will own less of the company than you did prior to the secondary... MileHigh