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Technology Stocks : Blank Check IPOs (SPACS)
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To: jayrao who wrote (941)5/18/2007 2:13:36 PM
From: a128  Read Replies (2) of 3862
 
Interesting write up.

But, it seems all too concerned on MAKING a deal, not neccesarily a deal thats good for the stockholders.

The insiders stand to gain a great deal if the deal goes through and the stock goes to $4 and stays there for years.

The cost of the option buys dwarfs what they stand to make if they close a deal...any deal....even if the stockprice goes down afterwards.

And the personal guarantee isnt really meaningful. the company paid them a fee for it and agreed to indemnify them.

Id be more inclined to buy if Insiders had bought big amounts during the IPO at the same prices as the rest of the public.

Now it seems their primary incentive is to close a deal. Even a deal thats dilutive to shareholders is good for their personal finances.
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