Re: new financing as "verrrrry bad news"
I believe you need to look at it in context. SyQuest made it very clear that they needed additional capital to succeed and that there were no assurances that they could raise the capital. Now they announce that they were, in fact, able to raise the required capital. In this context, the news is good.
I suspect that this is the last of the new financing and dilution (with 120 million shares authorized and 114 million already issued or researved). Now management can shift their focus from financing issues to production, sales and marketing issues.
Also, if my memory is correct, previous convertible preferred issues allowed conversion at a discount to market prices, while this new financing is not at a discount. The warrants, which will give them another 24.5 million in cash to shore up the balance sheet and expand operations are excercisable at a 30% premium. IMO, the terms could have been worse.
Regards - PerryA |
