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Technology Stocks : Information Management Associates - (IMAA)
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To: TFF who wrote (38)8/20/1999 9:13:00 PM
From: TheLineMan  Read Replies (2) of 165
 
Looking at the last 10Q it looks this way to me:
CMGI & partners invest 10 mil in buyingedge.com. For that $10 mil they get:
1) 30% of buyingedge.com and

2) 621,056 warrants of IMAA exercisable at $4. They can exercise and dump right now at $10 and make a $4 mil profit. and

3)another 1,612,903 warrants exercisable at $6.50. They can dump now right now at $10 and make a $11 mil profit. However if they dump now they have to redeem the $10 mil investment in buyingedge.com.

They can effectively walk out of this deal with $25 mil right now. If they do IMAA is diluted by 20%.

What gets me is if they own 29% of buyingedge.com and now that the warrants are exercisable they effectively own 20% of IMAA. IMAA owns
75% of buyingedge.com. In effect CMGI owns another 15% of buyingedge.com thru its IMAA warrants. Giving them 44% of buying edge.
So for $10 mil they got almost a half of buyingedge.com. and are showing an investment gain of $15mil on paper. Is this a good deal?

$10 mil = 44% buyingedge.com + 20% IMAA + $15 mil profit?????

Doesn't compute to me? These deals confuse the hell out of me - but it looks to me like CMGI made out like bandits here. But that's what I see - can anyone help me out with my sums?
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