RE: Some Old Issues...Phoenix and RG's shares
"All you have to do is ask"
(Not making an ass out of yourself in the process)
----Original Message-----
From: ztect@hotmail.com
Sent: Monday, June 05, 2000 4:22 PM
To: phenry@tsig.com
Subject: Please respond, if you can find some time....
Paul,
Could you please read and respond to these two
links (or the corresponding attachments)
to check if I'm getting my "facts" straight with
my rudimentary and cursory analysis?
*Morgan & Phoenix:
ragingbull.com
*Counting RG's shares:
ragingbull.com
Thanks,
ztect
========================================================================================
From: Paul Henry <phenry@tsig.com>
To: ztect@hotmail.com> Save Address
Subject: RE: Please respond, if you can find some time....
Date: Wed, 7 Jun 2000 10:11:32 -0400
Z,
As you know, I do not, as a matter of company policy
(at the advice of counsel), respond to Internet posts.
If you have specific questions, I will answer them if I can.
I will say that your rendition of the Phoenix events
is reasonably accurate, but some of the numbers are wrong.
Soros invested $25 million ($10 million in 94-95 and
$15 million in 12/96) for approximately one-third of
the company. The 56% number is somewhat artificial
in that it refers to an unlikely scenario whereby
Soros would exercise his warrants and convert his
preferred stock but no one else would do so. The
basic point I would make about Robert Gordon vis-a-vis
Phoenix is that he did the important things he
said he would do: (1) he got the joint venture approved
(first of its kind for the Chinese airline industry),
(2) he raised $25 million on very attractive terms from
a high prestige investor (Soros), and (3) he secured
as joint venture partner and customer the largest airline
in China, China Southern (which I am told now commands a
more than 50% market share in China). Within a month of
raising the last $15 million from Soros, Rob Gordon
replaced himself as CEO with Delbert Bloss, the former
head of Unisys airline group (which had installed the
Chinese government airline system). When Rob Gordon left
Phoenix's offices, never to return, the joint venture
was in great shape with China Southern just recruited as
the JV partner, Del Bloss installed as CEO, $9 million
in the bank with no debt, and Soros as the financial
partner - these are facts no one can dispute.
With respect to the your faxes/e-mails, I would simply
state that, to the best of my knowledge, the info
reported in the Forms 10-KSB is correct with respect to
all matters, including Rob Gordon's equity ownership.
FYI, the reverse split will affect equally all shares,
warrants and options. Hence, if Robert Gordon owns
16 million warrants, exercisable at $0.04, then he
will own, after the reverse split, 1.6 million warrants,
exercisable at $0.40. As I have stated to others,
the reverse split is a mathematical exercise that does
not change anyone's relative position. Each
shareholder will own the same percentage of the company
as he did before the reverse split, and each option or
warrant holder will be exercising at the same
market capitalization as before (and after exercising,
will end up owning the same percentage of ownership as
he would have had he exercised before the reverse split).
Regards,
Paul Henry
[Editorial comment, Paul's response obviously doesn't
account for the GS acquisition. But my questions were
posed prior to the release, and didn't directly
pertain in any way to share percentage ownership
relating to an increased OS due to acquisitions]. |
