Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.660

+5.2%

Nov 17 3:44 PM EST

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To: lbs who wrote (304)	12/4/1997 11:17:00 PM
From: Richard Barron	Read Replies (1) of 1418

Dan, The warrants expire in July 2000. It takes 2 warrants to purchase a share of stock at $9.06, The warrants can be called at any time since the stock has traded above $12.06 for more than 30 days. So, at $18 for the stock, the warrants would be worth almost $4.50 if called. It is unlikely the warrants will be called until they have a use for the extra money. At multiples as low as this, the company would do well to buy back the warrants to prevent dilution with a P/E multiple under 9. This would return an extra 11% on the investment and help support the price of the stock. A stock growing this fast deserves a multiple of 15-25, then a discount for the Asia factor. If they get the recognition they deserve, they will be able to use the stock to buy distressed companies cheaply. Richard

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