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Microcap & Penny Stocks : SETO Semicon Tools Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jmt who wrote (2408)5/16/1999 9:41:00 PM
From: James Lee Baldwin  Read Replies (1) | Respond to of 3222
 
Sorry. The word "anytime" is a little too strong.

The company being acquired must be profitable. Otherwise the acquiring company assumes the debts and liabilities which results in lower earnings and thus, a lower stock value.

Even if the company being acquired is profitable, the profit would have to exceed the value of shares issued. However, you usually don't get more than your money's worth.

None of the above matters if the company is acquired with existing stock (no new shares are issued). This is the best scenerio (unless the company being acquired is in debt up the wazzoo).

Lets also think about the stock split. A 2 for 1 split dilutes the price of a stock by one-half.

Just my thoughts.

James



To: jmt who wrote (2408)5/18/1999 12:46:00 AM
From: Dave Gore  Respond to of 3222
 
Yes, that is true. If one could acquire Microsoft for 1,000,000 shares of SETO, no one would claim the acquisition was dilutive.

This is a silly example, but you get the point. If the company you acquire increases EPS than it is a good acquisition.


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