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Technology Stocks : ESVS - ENHANCED SERVICES CO INC
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To: Joe Copia who wrote (33)8/25/1998 1:11:00 PM
From: Rande Is  Read Replies (2) of 60
 
Big dilution news:

Robert Smith, Enhanced Services' chief financial officer, said: "It is important to clarify the equity structure of Enhanced Services on a fully diluted basis to give our shareholders a clear picture of the company. After the company receives shareholder approval, files a registration statement, obtains all requisite consents and increases its authorized share capital, and subject to additional financings or acquisitions, we anticipate the capital structure of the company will consist of approximately 14.0 [million?] common shares outstanding; up to 2.5 million preferred shares, and redeemable preferred shares valued at $12.0 million."

Comment:
If we are talking about common shares alone, 14.0 million is 11.0 million more than the 2.99 million currently outstanding. I figure that to be more than a 460 percent dilution straight across. In other words ESVS is buying ZULU's "assets" for free. But because we don't know if ZULU actually has assets for their failure to report, I'd say ESVS is getting just what it is paying for.

As for the .58/per share, that is strictly hype based on what is presented in the press release.

I stated twice in two days that the printing presses were running on this ZULU/ESVS deal. But I had no idea they could run so fast.

Rande Is
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