>consensus opinion from accountants and analysts indicates it is
>unscrupulous or desperate companies that initiate this kind of financing
Craig and Bruce, lest there be any confusion, I do not mean to "seem" to be putting a positive spin on WIND's Reg S convertible bond offering. I am flat-out, unreservedly, categorically totally supportive of the offering, absolutely thrilled with every aspect of it.
The SEC opened the Reg S door because the government saw a need for this type of expedient financing. Desperate companies have abused and therefore tainted the mechanism. The SEC knows this and is trying to change the rules to prevent these abuses in the future. Properly conducted, the mechanism has a place with companies like QCOM and WIND.
As far as I can see, there is not a penny's worth of difference between QCOM's offering and WIND's. Further, I believe past abuses were caused by desperate, not unscrupulous, companies. It is easy to imagine financial pressures that cause companies to sell their soles for a cash infusion. Often the alternative to a Reg S offering at a discount is a heavily discounted private placement, which is just as bad. In my mind, neither implies unscrupulous behavior, merely desperation. Most sophisticated stockholders realize that the alternative to a discounted offering often is something worse, possibly even bankrupcy, and therefore often is the least of two evils.
With a $100 million in cash, business coming out of their ears, and on track to become a world-class growth company, WIND is not and was not desperate for funds. It should be obvious that WIND can select any financial mechanism it wants. Ron Abelmann stated clearly that he liked the convertible bond mechanism for all the reasons I posted previously, and chose it. I have watched Ron execute to perfection from the day he joined the company, always with the absolute intent of advancing WIND to the highest level. It takes very little faith on my part to believe him about this, especially since all the numbers add up exactly like he says.
Let me repeat that I condone a healthy examination of Reg S and negative experiences stockholders have experienced with other companies, if only to learn what distinguishes a proper offering from an abusive one. However, I am very uncomfortable with casual use of terms like "unscrupulous" or "desperate" being associated with WIND management or employees. Neither is true, and they deserve much better treatment than that from their investors.
Craig, I confess I am not an expert on the availability of US stock to foreigners. I know that I do not have convenient ways to buy non-US-listed stock. ADRs are available for some foreign companies, but buying a stock directly off a foreign exchange has never been easy for me.
Allen |
