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Technology Stocks : SYQUEST

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To: hankiba who wrote (6099)4/7/1998 3:17:00 PM
From: Dale Stempson   of 7685
 
You're correct in that the warrants will eventually provide a significant amount of cash for SyQuest. They will need every penny of it to finance continued ramp-up, marketing, etc. until they can begin to generate cash on their own. Your point is not overlooked, but simply the bottom line is that in projecting future EPS and stock valuation scenarios, the expected increase in shares outstanding should be taken into account.

BTW, there is no guarantee as to when the warrants might be converted. SyQuest needs the cash now, and unless we see continued price appreciation or a "special deal" issued, holders just might continue to hold. I believe this situation provides a real incentive for management to perform in the short-term (another reason I like the short-term trading play).

Regards - Dale
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