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Strategies & Market Trends : Joe Copia's daytrades/investments and thoughts

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To: Joe Copia who wrote (24239)	3/7/2002 9:50:44 AM
From: Joe Copia	Read Replies (1) of 25711

Folks there is an email out there about MPWR. It is misleading, imo. From what I gathered in the WSJ article is that a new company MPWR will be formed and the bondholders will get 85% of that. The remaining 15% will go to the preferred shareholders. Common shareholders of MPWR get screwed .. like all common shareholders in a bk. again! (this is exactly why I love ACOCP over ACOC). The email follows: Easy Money play, IMO.... Nasdaq: MPWR (.06x.07) Avg vol: under 2M, yesterday 16 Million Shares Outstanding: 59,391,000 Float: 23.2 Million (almost traded that already) 52 week hi/low $4.75/.04 Mpower struck a deal with holders of about 65 percent of its $380 million of bonds under which bondholders would receive about five cents for every dollar face value of bonds, plus an 85 percent ownership slice of the reorganized company, the Journal reported. The company plans to complete the deal through a bankruptcy filing, but only after it solicits support from additional bondholders, the Journal said. In addition to the bond debt, the plan would eliminate about $200 million of preferred stock, reducing total company debt from about $630 million to $50 million and trimming about $65 million a year of interest expenses, the Journal said. Preferred-stock holders would share the remaining 15 percent ownership of the reorganized company with holders of common stock, the Journal said. After reading this you can simply do the math. 1. Bondholders get 19 million for their debt of 380 million plus 85% stake in new shares of reorganized company. 2. 50 million in debt. 3. Common and preferred share remaining 15% probably according to current allocations common float 39% of preferred. Company has going into Chapter 11, 148 million in cash places preferred and common market cap at 22 million or 30 cents per share based on current valuations. Institutions saw this today and bought up 40% of the float. MPWR should rise easily back to this level prior to March 19. Please make up your own mind!

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