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Technology Stocks : Information Architects (IARC): E-Commerce & EIP

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To: John A. Paul who wrote (277)	4/19/1997 12:13:00 PM
From: Jeffrey S. Mitchell	of 10786

Yes, Paul, they don't call it the "dreaded Reg S" for nothing. This was a major topic of discussion among Alydaar and several brokers after the Westergaard conference. After going through a list of possible alternatives, everyone involved concluded that Alydaar did what made the most sense. I'm not a broker, but from what I gather, companies that pursue Reg S offerings fall into 2 categories: 1) those that need cash to insure they have a shot at getting contracts, and 2) those that need cash to insure they can stay in business while fulfilling contracts. Most companies fall into the first category; they are simply trying to keep the dream alive. Alydaar, IMO, fits into the latter category-- they have contracts. If 6.5 could get you 50, wouldn't that be a no-brainer? Reg S gets its bad reputation from a subset of companies that fall into the first category. There are many unscrupulous "off-shore" financiers that soak up Reg S shares because they smell a quick buck at the expense of na‹ve investors. In other words, they don't care whether the product or service is viable, they only care whether people will continue to believe it is viable. Since they only want money, they dump shares with impudence (i.e. no regard how it may impact shareholders) just to turn a quick profit and move on. As you have pointed out, the effects are often devastating. On the flip side of the Reg S coin are companies like Iomega. Suffice to say I might never have had the pleasure of purchasing and using my Jaz drive had that financing not gone through. I'd bet that the shareholders that cashed in their stock in the 50-110 range when the product hit the shelves are also pretty happy don't you think? Here's hoping we're all afforded that luxary with ALYD<gg>. - Jeff

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