Just to clear up some of the Sili-ness around here, I will attempt to make my point clear:
1) Answers.com is by far the most important aspect of the NetShepherd family.
2) NetShepherd, excuse me, the shareholders of Netshepherd owned 100% of the Answers.com from a purchase made in August, 1999
3) Mr. Baan owned the majority of Clickchoice (I think it was 88%) and while Clickchoice is of value, it certainly pales in relation to the potential of Answers.com
4) Mr. Baan, in order to further his own B2B strategy with the Vandenburg Group, and primarily as a next step for his BAAN Sfotware company, needed to get his hands on answers.com
5) Answers.com was slated to go for IPO in March, 2000 before a deal with Mr. Bann was contemplated. This was confirmed as a result of a Due Diligence meeting held between Denise, Barry K, Crazy_Canuk and NetShepherd in August 1999.
6) Through the IPO, it was going to be attempted that Answers.com would be valued at close to $100 Million.
7) If that IPO had taken place, by now if the timing had of been kept, there would have been an opportunity for a significant cash infusion into Net Shepherd, thereby removing the need for a cash infusion by Mr. Baan.
8) Initially, there was talk of having about 12 Million shares issued in Answers.com, now we are finding out over 33 Million shares exist.
9) A private placement has been recently completed for shares in Answers.com by insiders of Answers.com and Netsheperd. These shares were being valued at $0.75US! Yes, that's right, 75 cents. This comes from the Valuation and Fairness Opinion produced by Yorkton for NetShepherd.
10) In the Valuation and Fairness Opinion, Asnwers.com main comparable, AskJeeves was not even used in calculating parameters for market valuation. Does this seem right? For your information, Yorkton projects that the market valuation of Answers.com is around $30 Million. Let's see, that means that with 33M shares outstanding, we might get a $1 per share in an IPO. Now, if this is right, do you think you would be investing in Net Shepherd? Now, if this is wrong, should it have not been corrected in the Fairness and Valuation Opinion by Yorkton?
11) If you consider that maybe Answers.com should be valuated at closer to $100M, rather than the $30M Yorkton came up with, then Mr. Baan would have gotten significantly less shares for the Clickchoice merger, or he would have had to place alot more money into NetShepherd.
12) In the two measurable valuations methods within the Fairness and Valuation Opnion, NetShepherd was valuated at 68 to 138M (before the Enhanced Business Transaction), and 111 to 162M (before the Enhanced Business Transaction). Clickchoice was valuated at 51 to 98M. However, within this Enhanced Business Transaction, Mr. Baan received 2.22559 NetShepherd shares for every Clickchoice share, does this seem reasonable to you? And these 2.22559 shares do not include the cash infusion he made, of which he got shares at 3 each.
13) The insiders of NetShepherd are currently being rewarded through share options and actions in private placements that do not require our approvals. And, these options and private placements are in the jewel of the NetShepherd portfolio! They know that a $0.75 share in Answers.com is MUCH more valuable than a $5 share in NetShepherd. But why would they think that if Answers.com is only worth $30M? Because it isn't worth that little, it's worth alot more than that.
14) Mr. Baan effectively owns NetShepherd, Answers.com, and all the others since he now has true majority ownership. we now have shares in a company that collectively we have NO say in.
15) Watch out for more potential private placements in the coming months. Probably used for "speeding products to market"! Better to have a lower NetShepherd share price for that as well.
15) Things have gotten pretty dilutive. All in all, Mr. Baan now owns just over 50% of a company that has a market value of $4 times 70M shares = $280M, representing about $140M. Before, he had 88% of Clickchoice ($70M), $7.5M cash and 3.3M NetShepherd shares = $13M for a total of $90M. So, $90M versus $140M, which do you think is fair as his return on investment. He basically should own a third of the company, not a half.
16) Further dilusion of Answers.com and the others will take place, just wait and see. Thereby leaving us with even less in this company and AppCos.
But, don't listen to me, listen to the insiders that just picked up shares at $0.75 thank you very much. And, the wonder out loud whether we can legally participate in the IPO while they line their pockets with our shares.
And, btw, I'm just Sili, so it don't mean anything! Mr. Baan, I'll say it again, you certainly are smooth! |
