CB,
From the 8/24 SC 13D/A:
"Vulcan Ventures beneficially owns 20,222,139 shares of the Issuer's [HSAC] common
stock, representing approximately 37.4% of the shares of the class outstanding
based upon 54,117,849 shares outstanding as of June 9, 1999, as reported to
Vulcan Ventures by the Issuer."
It looks like my assumption that warranted shares are from the existing common stock pool may be false (they are probably convertible); for the sake of argument, let's assume that warranted shares are new issue (I'll concede re dilution). Then total common share outstanding (if full warrants are exercised) would be 7.75M + 54.12M = 61.87M shrs. At this point, ownership would be:
VV: 20.2M / 33%
Charter: 7.8M / 13%
How will Charter have all that control when they are still minority compared to VV/PA?
...but where will HSAC really fit in Charter, and at that point what value will our dilutive shares really have in the market.
Here's how HSAC fits in Charter:
fnews.yahoo.com
"High Speed enters exclusive long-term contracts with cable operators to offer their customers Internet access. Consumers pay less than $40 a month for unlimited cable modem access plus 10 hours of dial-up access. It also rents users cable modems for an additional $9.95 per month.
The company hands cable operators a portion of the monthly fees. For example, High Speed pays Charter 50% of gross access service revenues, 15% of gross revenues for its "feeder" dial-up services, and 50% of gross revenues from additional services. Charter gets half of the equipment sales High Speed makes to Charter's cable customers."
Here's what value our dilutive shares will really have in the market:
From the standpoint of a comparative reference, ATHM currently has access to around 28M homes passed (I could be a little off on this figure, but somewhere in that ballpark), and a market cap of $14B, or about $500/home passed. Assuming HSAC picks up access to 11M of Charter's homes passed at a cap value of $500 each, that's a market cap of $5.5B. Compare that with HSAC's current market cap of $1.42B and that's an increase of almost 400%. Seems like a fair tradeoff for the small percentage dilution we're talking about.
As for the stagnation, all of HSAC's eggs are in the Charter basket, and investors know it. So while it's quiet on the Charter front, HSAC isn't going to experience any dramatic movement; but the Charter IPO (10/11) will effect movement in HSAC's price and what do you think will happen to HSAC's price when, after Charter's quiet period ends, the PR's start coming out with announcements of warrants being exercised?
Regards,
PM |
