Unterberg Harris
Tom,
the only reason I did DD on LDII was because I pour through every S-3 and SB-2 filed at the SEC each day - looking for short candidates.
That is, companies that issue a ton of stock on terms that rape shareholders and lead to predictable sales of placement stock on the market - trashing the stock price. . .
In many Private placements, the companies are so sick that they rape existing shareholders by handing out stock to placers at severely discounted prices. For example, CDRD (another Unterberg Harris stock) borrowed $25 per share from placers in april and will pay back the placers $36.66 in november. . . a 38% return in 8 mo. to the placers at little or no risk.
Many of the S-3's list the actual names of the private placers which provides additional insight as to the real ugly placements because you begin recognizing the real sharks who covet such deals. . .
If you are interested in these ideas, I invite you to read:
www3.techstocks.com
www3.techstocks.com
www3.techstocks.com
www3.techstocks.com
I stopped following LDII after the ann meeting because while the prospect of all the placers coughing up $3 per share to LDII (or whatever it was) to receive shares worth $9 and then likely dump on the market (and then on top of that - receive another free-bie warrant - in the money) seemed quite enticing to me as a short, the Lucent deal scared me off.
FWIW, as a short, finding the Unterberg Harris name attached to a stock is a big bonus... =)
anyway. . .
if I were a LDII shareholder, I would question:
1) whether LDII really needed to pass out the millions of freebie warrants to entice the existing warrant holders to convert
and perhaps more damaging:
2) if the President and CEO had been building this deal with Lucent over a period of 3 months, why they would go ahead and price the freebie warrants at a price of $8.75 (instead of $10.75) about 2 weeks before the Lucent deal was announced.
If I were CEO, I would first tout the Lucent deal and _then_ price the freebie warrants. . . to do otherwise was either ignorance or to knowingly crucify existing shareholders.
If one calls the CFO, they will say something like - oh, we needed to price the warrants on that day. . . to which as a shareholder one would want to scream - "well, for heaven's sake - why not push up the date of the Lucent announcement etc. . ."
at shareholder's meeting I didn't scream because it wouldn't have mattered. . .
If I am not mistaken, something like 2 million freebie warrants were passed out. . . making for big $2 per share enrichment to placers at LDII shareholder expense. . .
But, who knows. . . perhaps coupling the technology from Lucent with their own will really pay off. . . like Larson said at the shareholder meeting. . . the technology could be used for a variety of things. . . like to put a tester in your car's transmission. . . such that you could have a light on your dashboard that would tell you the quality/degradation of your transmission fluid etc. . .
so, maybe there is great deal of promise for the future . . .
Cheers. George |
