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Silicom Ltd. Message Board

  • hindenburgdown78 hindenburgdown78 Mar 26, 2014 6:44 PM Flag

    Offering vs. Bank Financing

    With such growth in their stock recently, wouldn't it have made more sense for them to go to a bank for cash instead of diluting their own stock? In the end I trust what they're doing as their track record gives them great credibility and they still hold 24% of the company, but it would have been nice to get some sort of comment with this.

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    • Go ask Mr. Z over at Facebook. He can't dilute his stock fast enough. And he's doing real dilution. Silc announced they have the option to dilute sometime over the next 2 years. Big friggin deal. What if they change their mind! If they had an immediate need of financing today they would have announced a date for a secondary and a price right now. Now they've already inoculated the stock and have flexibility. Darn good move in my opinion. We'll find out soon enough. Probably the end of April at the CC.

    • It's completely misunderstood and a major market over reaction. The shady shorts and day traders saw the sec filing and instantly thought slow down and shortage of cash and sold the stock. Those of us in the stock for years know the company has no need for cash for day to day operations. Nothing has changed from yesterday other than mngt now has a need for, or a potential need for, $80 millions in cash.

      We will find out more soon.

      Sentiment: Buy

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