Alien, you raise a good point about whether the liabilities would deter a purchaser. The liabilities are limited to three things: the puts (relatively small impact on the asset base of the company, even with shares at the current level, and note the reserve in the 10-Q), the long-term debt (issued at about $320m I believe, and today worth about $400m - completely payable out of cash), and the lawsuits (there is one outstanding from the Q1/99 stock-price fall, and another likely to ensue from the current fall). Of these, only the lawsuits would be ongoing. The other two are removed simply by spending the cash that is already there. Not pleasant, but doable, leaving enough cash in the bank (probably about $200m-$400m) to run the business. Don't forget that NETA has been and will continue to be cash-flow positive, both before Q4/00 and into Q1/01.
A break-up is complex due to the issues about who gets what, but honestly, do you really believe that its so complex that it can't be worked out? Hardly! Give Robbie Stephens, Morgan Stanley, Goldman Sachs, or Broadview some credit please!
- E
And forget about the breakups, no one will buy this company!!! Not even CA which is the worst.. The liabilities are pretty large at this point and how is it going to split up? Will mycio or mcaf get away without blame and let neta holders absorb all the blame? In which case neta aint even worth a plug nikel. The cash on hand is also a problem since the debt holders will not let that go easily since it is THEIR money, not the companies and not the stock holders. |
