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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: DJ Oglesby who wrote (7779)	4/29/1999 4:16:00 PM
From: Mark Peterson CPA	Read Replies (1) \| Respond to of 19700

--------OT--------- But don't they sometimes issue more shares just to raise more capital, and doesn't this dilute the value of the shares already outstanding? Absolutely. When a company has a secondary offering to raise additional capital, unless they have an extraordinary business model, I usually interpret it as a sign that the company has had more than its share of unresolved issues that will continue to be unresolved and I get the heck out of the stock because more often than not, current shareholders stand to have their ownership diluted. The EPS doesn't change, but the number of outstanding shares do, so the PE increases, and the stock, looking more than a bit pricey, gets sold off. Issuing shares for an acquisition can be OK if the acquisition is accretive to EPS or at least supports their business model in a way that returns value to the shareholders at some future date. When companies overpay for an acquisition using their shares and fail to recognize the expected benefits or synergies of the acquisition, the affect ultimately is dilutive (paying something for nothing), and shareholder value gets incinerated. But hey, if you're part of the management team, generally not to worry. By the time anyone figures it out, you'll still get your bonus and knock another year off the vesting schedule on your key employee stock options plan. I appreciate the quality of your observations. It gives us all reasons to rethink what's occuring in each of our investments. Best regards, Mark A. Peterson