The word is that Prudential is having difficulty selling the PCQT deal to institutions. Given the repeated delays for the IPO and the downward revision on the pricing, I do not think that it is going to meet with a positive reception. I do think, however, that it may offer a trading opportunity in the after market. I thought that I might update my back door analysis for HYPR.
As of July 28, 1999, HYPR had 15,000,671 common shares outstanding. There were also preferred shares outstanding that are convertible into a minimum of 4,786,600 common shares. Additionally, there were options and warrants on 6,436,694 shares at an average price of $1.70 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 net dilution of 4,952,981 common shares. If you add the current number of common shares outstanding and the potential dilution from the preferred stock and the various options, there are approximately 24,740,252 common shares.
HYPR will be offering 500,000 of its PCQT shares in the IPO, generating, at an offering price of $8 per share, approximately $4.0 MM in cash, or $.16 per share. HYPR will be retaining 9,300,000 shares of PCQT. Assuming a price of $8 per share, these shares will have a value of approximately $74.4 MM. Discount this amount by 40% for tax and liquidity considerations and you are left with $44.64 MM, or $1.80 per HYPR share. Subtract the $1.80 and the $.16 in cash from $7.375, the current price of HYPR, and the remainder of HYPR is currently being valued at $5.41 per share. Assumed that PCQT pops 50% and the remainder of Hyperfeed is currently being valued at approximately $4.51 per share.
If HYPR shows any sign of life pre-IPO, it should probably be shorted. JMHO. |
