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Diodes Incorporated Message Board

  • stockvictor stockvictor May 18, 2000 2:25 PM Flag


    I agree goodtiming,
    China's WTO status is
    really gaining steam with congress. I don't believe we
    can even conceive what the effects of bring China
    into the fold will be. From an overall humanity
    history point of view I think we are also in agreement
    about threats. I like playing the game of thinking what
    the world's geopolitical landscape will be 500 years
    from now. I think it would be foolish to believe there
    would not be a lot of China written all over


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    • With this market, I find it hard to suggest a single stock. I must say, however, AMK has been impressive (though I own none).

    • you are the most annoyingly optimistic poster on
      this board. I appreciate your posts even tho they are
      90% sunshine and light. I'm wondering if there are
      any other companies that you are as optimistic about?

    • Thanks for replying Joe. Please look at VSH. It

      has done well. Was 94 and pulled back to 85+, but is
      definitely far ahead from late April when it was 70ish. Just
      look at AMK.
      I am not a DIO basher. I just don't
      understand why DIO with all the good fundamentals fails to
      atleast keep up.

    • the lucky SOB who was able to pick up DIO at 28 1/4 today.


    • "I thought I bought a winner in DIO"

      What stocks do you see doing well? For the last several days, all I have been seeing is a bloodbath everywhere. I don't think DIO is special here.

    • wtmhouston,

      Thanks for the reminder on the
      distinction of treasury vs. authorized, I either forgot, or
      more likely never learned the distinction. It good to
      have such an educated board!

      There has been some good discussion this weekend on
      this topic. Make sure you go back and check it
      <<My gut feeling is the new shares are good

      I am the most annoyingly optimistic poster on the
      board regarding DIO stock price. However, this one has
      me thinking. To tell you the truth, I have the same
      gut feeling that this either is or will be very
      positive for us in the future.

      DIO earnings have a
      very long way to go on the upside before they start
      slowing down (if they ever do).

      12-18 months from
      now, looking back at today, what will we say DIO did
      with the new authorized shares:
      (a) nothing
      (c) SPO
      (d) acquisitions
      (e) fufilling current
      and new stock option obligations

      (a) would
      probably be the worst; (b) would be good for investors;
      (c) would improve the balance sheet and potentially
      help in timely capacity expansions which would be good
      for investors; (d) would definately provide for
      timely capacity expansions [there are other undervalued
      companies for our undervalued stock]; (e) will happen to
      some extent as it happens to some extent with all
      publicly traded companies.

      Although I'm not sure
      what DIO will do with the new stock, I am pretty darn
      sure our earnings are going to keep increasing at a
      nice clip!

      Here's hoping we will say "Damn I'm
      glad they authorized the shares in


    • As has been pointed out, increasing the number of
      authorized shares gives the board some flexibility to: (1)
      split; (2) provide cash through a SPO; (3) use the
      authorized but unissued shares for acquisitions; or (4) fund
      stock option plans. There are a couple other
      theoretical possibilities (like a direct trade of stock for
      debt) that I don't consider even worth

      IMO, a split or an acquisition are the most likely
      future scenarios. I used the word "future" on purpose
      because, IMO, the stock price would not support a
      meaningful split right now. It would need to be in $50+
      range to support a 2 for 1 or $75+ to support a 3 for
      1, IMO. Either are a ways off, IMO.

      A couple
      of clarifications. First, "treasury stock" is issued
      stock bought back by the company. It is not the
      difference between issued and authorized shares. Share
      buybacks create treasury stock; increasing authorized
      shares does not.

      DIO could not simply "dump the
      shares on the market." First, authorizing additional
      shares does not allow the company to begin selling those
      shares; they must first be registered. A company's sale
      of registered stock is almost always done by way of
      a secondary public offering, also sometimes called
      a follow-on offering. A reputable company almost
      never just sells shares in the open market and there is
      NO reason to think that DIO would do so.

      by "dump the shares on the market" you meant sell
      them in a SPO, the money would get put to use --
      either to retire debt (as VSH just did) or to fund
      expansion. I don't see a need for either here. Besides,
      companies generally do not consider SPOs when their stock
      is seriously undervalued.

      IMO, the
      authorization of more shares is no big deal and is just a part
      of normal, typical, forward thinking by the Board.
      For example, VSH increased there authorized shares a
      year ago from 75 to 150 million but did very little
      with the extra shares until recently.

      On a
      different subject, the China tax situation, beginning 2001,
      DIO will no longer enjoy tax free earnings from its
      Chinese subsidiary. As I recall, the Chinese tax rate
      beginning in 2001 is 16% and it rises to 28% either one or
      two years thereafter. I am pulling these percentages
      from memory so they may be off. Everyone should check
      the last 10K for the precise numbers and


    • I believe they are expecting great results and
      hoping for an AMK type run. Like AMK they will then
      announce a stock split in hopes of getting volume up and
      some analyst coverage.

      Hopefully China getting
      US approval to enter the WTO will give the stock a
      pop. This will make them an ideal acquisition
      candidate because they are already up and running in


    • If they authorize the shares to eventually sell
      them, then you have to ask what they need the money
      for. Debt reduction -- usually not a bad idea with
      rates rising; looking at what's available on this site
      (June, 1999 financials), they don't seem to be in bad
      shape debt-wise, but maybe they have borrowed more
      since and want to pay down. Or maybe they need more
      cash for expansion. A secondary offering may be
      somewhat dilutive, but the proceeds might be important to
      the company. If you've got some cash, you can buy
      your proportionate share of the offering (albeit maybe
      not at the offering price, but not too different, as
      the offering will have to be at "fair" value -- also,
      the secondary will typically depress the stock
      initially just because of the increased number of shares,
      so if you time it right, you might be able to buy at
      a favorable price.) Of course, bottom line, I would
      rather not see a secondary offering, unless the company
      really needs the cash.

    • seams like they would dump at least part of the
      shares slowly, if the price and volume warrents it. 1
      mil shares at 30-40 could pay for expanisions
      quickly. Some of it could be used for a split but maybe
      not imediatly. Any way they use it it seams like
      excess of new shares that's got to be dilutive. Just
      thinking out loud. BEER

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