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Technology Stocks : Rhythms NetConnections Inc. (RTHM)
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To: 10K a day who wrote (297)8/25/2000 1:47:48 PM
From: BWAC  Read Replies (2) of 378
 
The convertible is a problem. Under $10 is a problem. The insider sales are a problem. But there is one overriding point that is lost in the shuffle.

And that is the presence of $900 Million in cash to build out their system. (Or is it earmarked for executive option grants! Ha!) Granted the cash came from the unfriendly termed convertible debt, but it is there, the transaction has been complete, and the market is in no mood right now to finance other similar businesses going forward.

Wouldn't some competitor like to have access to that cash? For their own use? And get the systems already built out? The customers already in place? Delete some management? Delete some management pay?

The current market cap is $700 Million. Which is a discount of 22% to the cash on hand. That should make up for the unfavorable convertible terms to any prospective buyer.
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