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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: William Epstein who wrote (11420)	5/25/1999 11:39:00 PM
From: Eli74	Read Replies (1) \| Respond to of 27311

Not sure I would agree near term (next year), but that's neither here nor there (at least not on this thread discussing the soon to be immense profits of being long VLNC). Regards

To: William Epstein who wrote (11420)	5/26/1999 12:34:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

William, raising money via equity is not free. It dilutes the value of the outstanding shares, and dilutes the profit per share once profits are earned. Raising money via debt also reduces profit per share due to the need to pay off the debt. But once the debt is paid off, there is no further dilution of profits. Selling additional shares results in permanent dilution (unless the shares are repurchased by the company in the future). Whether it is preferable to raise money via debt versus equity is largely a function of the price at which the company can sell shares to raise equity financing. In today's market with high stock prices relative to earnings, it is usually a better deal to sell shares rather than borrow money. In the case of the internet stocks with huge market caps. relative to earnings (if any), it is a no-brainer.