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Radware Ltd. (RDWR) Message Board

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  • kdp2561 kdp2561 Jan 5, 2000 6:25 PM Flag


    I have had stock in other companies that have had
    secondary offerings. To really understand you have to
    remember that a stock's price doesn't always represent a
    company's true worth. On one hand you have a company's true
    worth, the assets (capital, equipment, employees, etc.)
    minus the liabilities of the company. On the other hand
    you have what people are willing to pay for a
    company's stock. These two are NOT the same. Now, a
    secondary offering will add more shares to the overall
    total of available shares. THIS WILL DILUTE THE STOCK
    PRICE SHORT TERM (though not necessarily severely).
    But, what we give up in short term stock price the
    company gains in long term ASSETS! The money that is made
    by RDWR will be invested in additional R&D, sales
    force, perhaps even acquisitions. Think about it this
    way, if RDWR sent you a letter asking, "Would you
    allow us to lower the stock price short term so that we
    can increase our assets? We promise to use your money
    to increase shareholder value so you end up getting
    it back." I would say "Sure go ahead.� because I am
    a long-term investor. Short-term traders will not
    like this because they are unwilling to wait around
    for the benefits. This is why it is generally viewed
    unfavorably by many. But the truth is there is not much
    difference between this and a split. More shares exist
    afterwards. The per share price goes lower, which attracts
    bargain hunters. Volatility decreases. But, in this case,
    the company gets a piece of the pie too! BUY, HOLD,

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    • I have been long on RDWR for over 2 months, and will continue. Thanks and good luck.

      BTW, I wonder where christ6666 is, hummm, he probably starved to death!

    • Hypothetically , If RDWR were to make let's say a
      $.04 per share profit this qtr. Now with the
      additional shares they are going to issue, how would there
      profit look (per share) if those additional shares were
      already issued? it would be about $.025 approx instead,
      correct? If you look at it this way it doesn't seem all
      that bad.

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