Hey Z,
I finally took the time to look up the Form 8-K on Edgar and get the straight scoop on the exchange of MDCD stock, since I have seen some conflicting postings on how it will happen. Here is my take on the decision process for purchasing MDCD:
Form 8-K says about conversion rate (I'll skip the part on QNTM closing below $14):
1. .489 if $14< QNTM <$20.
At today's approx. $7.75 for MDCD, seems to be a $15.85 value for a share of QNTM.
2. if greater than $20.00 then the exchange ratio shall be a fraction having a numerator equal to $10.00 and a denominator equal to Quantum Share Value.
At today's approx. $7.75 for MDCD, the value which would be placed on QNTM actual average price over the 5 days preceding etc. etc.
if $22.50, the ratio is .444- basis in QNTM about $17.45,
if $25.00, the ratio is .40 - basis in QNTM about $19.37,
if $30.00, the ratio is .333- basis in QNTM about $23.27,
if $40.00, the ratio is .250- basis in QNTM about $31.00.
This implies that if QNTM were above $30 at the closing of the acquisition, then smarter today to buy QNTM at 21 something rather than MDCD at around 7 3/4. If QNTM is below $25 at the closing of the acquisition, then smarter to buy MDCD at today's ratio with QNTM.
Awful lot of "if's" here, including "if the acquisition closes" and "when it closes- before or after tracking stock starts?", in addition to all the mystery around what affect the tracking stock will really have on lifting the current value of QNTM.
Gee, I love a good mystery. No recommendations here, but does this analysis seem to hold water?
-TOKO |
