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To: pat mudge who wrote (1679)	2/5/2000 9:24:00 AM
From: riposte	of 2347

Warrants Draw Big Customers An interesting article @ InteractiveWeek. I like the part about SEC scrutiny... Steve Warrants Draw Big Customers By Kimberly Weisul, Inter@ctive Week February 4, 2000 2:18 PM PT URL: zdnet.com Big deals often mean big concessions. That's the lesson start-up Web companies such as Commerce One and Ariba are learning as they try to sign the Fortune 500 as customers. Commerce One, an online procurement company, recently signed General Motors, Mexican bank Banamex and Royal Dutch/Shell as customers. The deals were all sealed with warrant arrangements that work much like stock options. The warrant holder is promised the ability to buy future shares at a set price. The deal would allow GM to earn the right to purchase about 5 percent of Commerce One. Both Banamex and Royal Dutch/Shell could receive Commerce One (www.commerceone.com) shares if their joint ventures with the company prove successful. In return, Commerce One will receive shares in the joint ventures it is helping to build. Exact terms of the GM agreement are expected in the coming weeks. [SNIP] In all three cases, the right to purchase shares is contingent upon performance goals or initial public offerings of joint ventures. That means conventional analysis won't yield a hard-and-fast value for the scrip, making it difficult for shareholders to determine the true value of the sweetener. Because of this difficulty, the Securities and Exchange Commission (www.sec.gov) has directed accounting regulators to review these types of grants.

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