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Technology Stocks : MRV Communications (MRVC) opinions?
MRVC 9.975-0.1%Aug 15 5:00 PM EST
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To: Dan Spillane who wrote (261)10/2/1996 5:25:00 PM
From: Lucas Hsu   of 42804
 
Dan,

You are right in that the private placement allows MRVC
to obtain new cash...BUT these private investors usually gets
the new stocks at a significant discount! I rather see MRVC
do a secondary offering in the US markets so that I will know exactly
how much dilution the additional stocks will affect earnings. At
the moment, this information seems to be lacking.

Not true about XYLN having no cash. If memory serves me
right, XYLN has over $150M in cash from their IPO while if you
look at MRVC balance sheet, it says that cash and equivalents is
less than 3 or 4 million. (Obviously this is why they need to
do the placement since they have to dish out 10M for the acquisition.)

I stand by the negative cash flow statement. Look at the
December 95 balance sheet and compare it to the most recent one....
Cash available dropped by over 50%.

BTW, don't get me wrong. I aint a bear. Had a large position,
but sold 80% of it during the recent run up. And I will be buying
them back if it goes down to the $20 support level.

Was just pointing out a possible negative for discussion
purpose as per Sam's post. Besides this lack of cash, I don't see
much wrong with MRVC. But they do need to solve this soon!

Cheers,

Lucas
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