Dale, RE: Shares outstanding / buyout
According to SyQuest's July 30th S-3/A they had over $108M dollars of preferred shares outstanding. I expect that any buyout would have to payoff that $108M one way or another. And, there's this little matter of an additional 127M plus shares outstanding. It looks to me like SyQuest has too many hands in the cookie jar, with only crumbs left.
If all that preferred is converted at the current price minus a 15% discount, you are talking about well over 200M new shares. (I don't know how much if any of that has already converted, since the S-3 was first filed.)
Don't forget, that SyQuest has two dilution limits that could require share holder approval (240M shares max, and 20% dilution max), and any delay can bring penalties. According to the S-3/A SyQuest has had to deal out a significant number of shares in the past for payment of delayed conversion penalties.
For anybody thinking Iomega is going to buy SyQuest -- WHY? What would Iomega gain? The license to sell an incompatible product that sells at a loss? Dream on!
Maybe Iomega could buy a couple of SyQuest patents, so that they could turn around and sue SyQuest (again) for patent infringement. =) I'm just kidding of course, but its the only thing that makes any sense.
SyQuest does not have a lock on some cool technology that makes it so they can build the SparQ. What they do have is the willingness to sell at a loss, and make it up in volume. Yeah, Right! If Iomega wanted to do that, they already have the drive ready -- Jaz. |
