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Author: ClancyFan Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 609  
Subject: A secondary offering Date: 4/1/2002 12:32 PM
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This board was suggested to me as a place to come to ask a question that I have. I am looking at making my first stock purchase, and have been following a stock for a few weeks now. The stock recently hit a 52 week high (150% higher than a year ago.) It has a current debt to equities ratio of about 1:3 and is aggressively growing. It's a restaurant chain whose principle method of expansion is to purchase floundering companies (often on a region basis) and turning them around. The company has a solid record of turning around failing businesses. Over the past 13 months it has made two major acquisitions which has significantly increased its debt (which is still relatively low---the current ratio is 0.6 and debt to equities is 1:3)

It recently announced a decision to have a secondary stock offering where it will sell about 4.5 million shares (currenlty there are 22.5 million outstanding.) What should I be looking for with this new issue of stocks? Is it a positive sign? A Negative sign? What will the likely long/short term effects be as a result of this decision? The announced purpose of the offering is to "pay down the debt and other general administrative purposes."

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