>> Seems that they are doing all of their biz with stock<<
Given their balance sheet, they had no choice. Jim Porter, their CEO, has actually done an excellent job cleaning things up. Absent PCQT, HFT might actually be profitable, though absent its primary growth vehicle. While not exactly a vote of confidence in the sub, the sale of the PCQT stock should give HFT some flexibility. Maybe some sort of acquisition? I have not yet had an opportunity to take a look at the PCQT S-1 so I do not have a good sense as to how the component parts will look post spinoff. Having PICO in control limits HFT's options.
The following is an update of an analysis that I did two weeks ago:
As of March 31, 1999, PQT had 14,830,351 common shares outstanding. There are also preferred shares outstanding that are convertible into a minimum of 5,013,663 common shares. Additionally, PICO Holdings has options on 3,106,163 shares at $1.575 per share. If these options are exercised and the proceeds are used to purchase shares on the open market at the current price of 7 3/8, this will result in additional dilution of 2,442,813 common shares. For the moment, I will ignore any additional dilution. If you add the current number of common shares outstanding and the dilution from the preferred stock and the PICO options, there are approximately 22,286,827 common shares.
PQT will offer 1,950,000 of its PCQuote.com shares in the IPO, generating approximately $25.35 MM in cash, or $1.14 per share, and it will retain 7,850,000 shares in the stock of its subsidiary. Assuming a price of $13 per share, the shares will have a value of approximately $102.05 MM. Discount this amount by 40% for tax and liquidity considerations and you are left with $61.23 MM, or $2.73 per PQT share. Subtract the $2.73 and the $1.14 in cash from $7.38, the current price of PQT, and Hyperfeed is currently being valued at $3.51 per share. Assume that PCQT pops 50% and HFT is being valued at approximately $2.15 per share. Given these numbers, there does not seem to be a lot of risk at these levels.
The above is JMHO.
PCQuote.com Form S-1:
ipocentral.com.
PC Quote Form 424B3:
sec.gov |
