The point is: unlike SSAX's recent press release, they have NOT settled "all lawsuits" and I think people need to see this without the typical Covey rose-colored glasses. The suit was filed by two major intitutional investors that hold SSAX stock -- Bain Capital and JMI Equity Fund. Now, if they don't get their way -- well, what would that do to the price if they started dropping their holdings? THAT is the issue, O/49. Do the research...
I quote from the piece:"Two institutional investors filed suit last month against an issuer and a placement agent over a financing deal that went sour. Boston-based Bain Capital Inc. and Baltimore-based JMI Equity Fund III together sued System Software Associates and Hambrecht & Quist. The two investors are seeking unspecified damages, but they claim to be out at least $154.5m and likely much more, according to court documents."
What went wrong? Here gives you an idea: "System Software...was poised to issue a $48.4m private placement in conjunction with a $90m convertible issue led by Alex Brown & Sons, which has since been acquired by Bankers Trust; the company had already entered into investment agreements with Bain, the suit said. But on Aug. 20, the last day of the roadshow, with the prospectus ready to be printed and hours before the consummation of the deal, System Software reneged on its agreement with Bain and turned to San Francisco-based investment-bank Hambrecht & Quist for funding, according to Bain's lawsuit. Hambrecht and System Software "secretly plotted," to break System Software's obligations to Bain as early as Aug. 8, according to the suit. The company offered Bain a $3m "breakup" fee."
Now: what's $3ml versus a potential $145?
The source of the article? Very reliable: American Banker's "Private Placement Report."
R/
PS;Sold my margin buys, which I got at the meltdown in the low 10's at 13.5 recently. Had to take the 3.5 bagger because these consistant lawsuits bother me greatly....could make for volatile swings. While I think the LONG TERM future of SSAX is good, its the short term that concerns me. I buy on anything under 11; sell over 13 until I get a clearer picture of what is going on behind the scenes. Just my opinion.... |
