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Technology Stocks : Broadwing Inc.
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From: tech1019/29/2005 12:24:54 PM
   of 4245
 
[The share price is unreasonably low, and the shorts are rampant. The Yahoo message board is one of the most active on the Internet and there are many short posters posting on the board 24x7 while the stock price goes nowhere.

Is it possible the PIPE owners want to take the control from Huber?

Will Huber be stupid enough to lose the wrangling? ]

finance.messages.yahoo.com

Payment in shares -- still so bad?
by: dianakat_1 (F/Lost in Hollywood)
Long-Term Sentiment: Buy 09/29/05 11:18 am
Msg: 99942 of 99950

There is a different dynamic as the situation changes.

I'm not sure one can safely assume additional share payments will negatively affect price. (Beyond perhaps a few days of momo stuff).

Many that post here (including me) believe that BWNG is severely undervalued because:

1. The corporation is closely controlled by management with a questionable record; and

2. PIPE holders have had an interest in acquiring sufficent shares to gain control, and have engaged in strategies to depress the price so as to acquire enough shares to take over.

If additional share payments are made at current prices, both these things could change:

1. Management would be accountable to a new voting majority, and might even be replaced.

2. The PIPEs lose any incentive to depress the stock of a company they would then effectively control.

The positive effect of these changes might well outweigh the effect of additional dilution.

On the whole, I'd still prefer payment in cash, because it is hard to know for sure what the PIPEs will do. But we can't just assume they will do exactly what they did in the past, as their position changes relative to the company.

IMO, payment in shares won't happen anyway because Huber is aware of the consequences of substantial additional dilution of his controlling interest.
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