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Technology Stocks : CSGI ...READY FOR TAKE-OFF!
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To: Michael Block who wrote (3381)6/6/2000 9:51:00 AM
From: Daniel Chisholm   of 3391
 
ConSyGen [...snip...] has approved a stock repurchase program under which the Company is authorized to purchase up to 4.0 million shares or approximately 20% of its common stock outstanding.

I wonder how they'll pay for the stock? As of 29-Feb-00 they had only $16,691 cash. Even after "converting" the $3.5M balance sheet "convertible debenture" item into equity, they are still running a shareholder's equity of *negative* $1.5M.

Their other current liabilities of note, which presumably ought to be paid Real Soon Now too: $314K of Accounts Payable and $737K of Notes Payable. That's about a milsky, give or take.

To this untrained eye, they don't appear to have much in the way of balance sheet strength or financial flexibility.

The stock, when purchased, will be used for corporate purposes. These purchases can be made in the open market or in negotiated transactions from time to time, depending upon market conditions.

What are "corporate purposes"? It was my understanding that the standard practice of most companies was to cancel repurchased stock, as a way to increase the relative ownership stakes of the remaining shareholders. It is this concentration of value in the remaining shares that makes stock purchase programs potentially positive.

Hmmmm, could this have anything to do with their recent 4-May-00 S-8 sec.gov in which they are proposing to register 5 million shares for their "2000 Combination Stock Option Plan"?

- Daniel
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