| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 2438.1 | | QUARK::LIONEL | Free advice is worth every cent | Wed Mar 31 1993 00:42 | 8 |
| Yes? And what would you like to say about this? I hope that your
purpose in posting this was more than just an extension of the
Livewire bulletin board.
The DIGITAL conference is for discussions about working at Digital,
it is not a bulletin board for arbitrary corporate announcements.
Steve
|
| 2438.2 | :^) | GUCCI::HERB | Al is the *first* name | Wed Mar 31 1993 01:53 | 9 |
| >QUARK::LIONEL "Free advice is worth every cent"
I think the personal name reflects my reaction. I did not happen to
look at Livewire lately however I noticed our stock price dived today.
Good point though. I heard that the Mill was being sold and HQ moved
to Carnobie Lake. Instead of showing your badge every morning, you buy
a ticket and get your hand stamped. :^)
|
| 2438.3 | | CTHQ::DWESSELS | | Wed Mar 31 1993 13:19 | 5 |
| My intent was to see if anyone knew for what the "cash at attractive low
rates" was to be used. Effective marketing such as I've seen discussed
here? Product development? TFSO? All of the above?
/dlw
|
| 2438.4 | | SAHQ::LUBER | Atlanta Braves: 1993 World Champions | Wed Mar 31 1993 16:36 | 2 |
| We wouldn't borrow money to support TFSO when it's so much easier to
whittle the severance package away to nothing.
|
| 2438.5 | Good move | ROCKS::SHARMA | | Wed Mar 31 1993 16:49 | 6 |
| Now that the interest rate have come down. It's worth borrowing money
through this channel if we need it.
I think it's a very good move.
Perwesh
|
| 2438.6 | | STAR::PARKE | True Engineers Combat Obfuscation | Wed Mar 31 1993 18:45 | 2 |
| Doesn't this strike awful close to the new "brand" release et al ?
|
| 2438.7 | | MIMS::PARISE_M | Southern, but no comfort | Wed Mar 31 1993 21:50 | 8 |
|
Maybe we're supposed to "imagine" it's not going to COST anything
to borrow a quarter of a billion dollars!
I can't understand TFSOing employees and trimming expenses to reduce
costs and then borrowing and incurring debt (interest - an expense).
Is this something like a corporate bill-consolidation loan?
|
| 2438.8 | Perhaps expenses are still higher than revenues? | SWAM2::MCCARTHY_LA | Texas Supply Chainsaw Massacre | Wed Mar 31 1993 21:53 | 0 |
| 2438.9 | Cheap Money may not last long | COMET::KEMP | | Thu Apr 01 1993 15:40 | 10 |
| I think the cost of the ongoing TFSO's was already charged against
earnings at the end of FY '93. I would not expect this issue would be
to fund additional TFSO's.
To look at it in a positive way, perhaps it is being assumed that
interest rates will climb in the future and $250 M at a low rate now
will be able to generate enough income in the future to cover this and
return something as well.
billk
|
| 2438.10 | Earnings Charge <> Cash Paid Out | BTOVT::SOJDA_L | | Thu Apr 01 1993 16:18 | 6 |
| That's true, the cost of the ongong TFSO's has already been charged
against earnings. However, the *cash* required to pay out this charge
is something else. It isn't necessarily available and it is possible
that the purpose of this bond issue is to raise it.
I don't think that's the purpose of the bond issue but it might be.
|
| 2438.11 | More than just a good ratio... | FASDER::SHORN | | Thu Apr 01 1993 17:40 | 34 |
| By the way, this is the third time we did this. All three have been
for 250M. DEC first issued 250M in debt the day the SEC gave an "OK"
to issue up to 1B of debt. The first issue took place at the start of
Q1. The second in Q2 and now at the end of Q3.
We have always been told the "standard party line" ...with this we will
still have a debt to equity ratio (or someother debt to something
ratio) that is less than the industry, therefore this is good. What we
have to keep in mind is that without issuing this debt money, we would
be eroding the 1B, + or -, that we have in cash. If we waited until
our cash position was very low to issue the debt, our financial picture
would not be attractive. Thus, we would have a difficult time trying
to issue the debt, especially a large chunk of the 1B.
The way I see it is this.....If we barrowed the money to keep our cash
flow high, that's A-OK. If we simply issued the debt because the rates
were attractive, than I don't feel we needed to increase our expenses
(the interest rate) for that reason...after all, we really have few
investments that we can increase that earn a substantial return
(20 to 30%).
Oh yes, one last footnote. Keep in mind that not all of that 1B in
cash is highly liquid. Some of that came from profits earned in
foreign countries. Some countries require that you keep a certain
percentage of your profits in that country. Thus, we could not pull
that money into the US to spend in the US for whatever. Actually, a
smart move on the part of the host country. The host country expects
the company to invest in that country (plants, equipment, etc.) or to
spend it there.
Bottom line, I hope it is all apart of a well thought out, globally
thoughtout plan.....THAT WORKS!
Scott
|