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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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To: pcstel who wrote (560)4/24/2003 1:01:01 AM
From: i-node  Read Replies (1) of 3386
 
Better to do a secondary now while the price is "near the 10s" than to wait until the Cash on Hand drops, (as well as the equity price).

I have no problem with a small secondary when the stock price is up; I doubt if we're going to see it at $10, because it is pretty clear this stock will see $20 this year, and they aren't really needing the money. If they can raise some money with a secondary at $20 and use it to reduce the 14% debt/interest then I would have no problem with it. At that price it will be minimally dilutive.

But, there was a sequence of events that caused them to re-evaluate their risk profile.. Surely, you know about "risk profiles"?

Actually, I don't believe they "re-evaluated" their "risk profile". I believe they fully understood the financing going in. This company has executed with absolute precision from the outset. It was simply a matter of them needing more working capital (which, by the way, they knew they would need some 2 years ago, and the break even point has only improved since then).

You have to start planning on how to minimize your exposure

I'm not sure where you got this. You do this kind of planning LONG BEFORE a problem develops. Seldom does a lender have any control AFTER the trouble develops UNLESS he is willing to get in deeper.
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