Sankar, Thanks for your explanation, however I can assure you that I haven't "presumed" anything and have a clear and complete understanding of dilution.
Syquest may indeed turn things around, but that fact remains that they currently have very little to show for the $145 million in financing received thus far other than cashed payroll checks and major share dilution. There has been no growth in earnings because there has been no earnings.
In addition you state: The new equity investment signals that the NEW equityholders are more informed about SyQuest's opportunity than outside shareholders. On the whole, it appears to be a good credible signal that the company will do better EPS-wise.
In a way, you're correct with this statement, only the NEW equityholders are more informed about the great terms and conditions surrounding their special financing arrangements than outside shareholders.
Check out the SEC filings and you'll see for yourself that outside shareholders are footing the bill for these very expensive forms of financing (price floors & caps, and millions of free warrants).
Granted, Syquest absolutely must continue to obtain financing to exist, but don't be misled to believe that the NEW investors are sharing the same risk as outside shareholders.
Regards - Dale |
