You'd think that Affymetrix
But such an assumption would be far from the truth. The Rule Breakers biochip maker has earned $0.13 per share in the last four quarters and had $250 million in cash and short-term investments at the end of last quarter. The cash infusion is certainly no last-ditch effort.
So why would Affymetrix want to double its cash position? The company says it'll use the money for one or more of the following:
- Funding its operations (but it's making money, so let's hope not).
- Capital expenditures (it's in the process of moving some manufacturing operations to Singapore, so this is possible).
- Repurchasing senior convertible notes due in 2033.
- Potential acquisitions of businesses (BINGO!).
My idea is that Affymetrix is looking to buy supplemental businesses for its recently established diagnostic operation to distinguish itself from rival Illumina
Ventana Medical Systems'
Another choice might be Myriad Genetics
Whatever company Affymetrix buys -- or even if it just sits on the cash -- Tuesday's sell-off probably was not justified. It's possible investors were a little jittery from Affymetrix's soft 2006 results and lofty trailing P/E.
But investors who want shares of the comeback kid are now in the middle of a 10%-off sale.
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