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Technology Stocks : Osicom(FIBR)
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To: CH who wrote (5790)3/7/1998 2:59:00 AM
From: Grantcw  Read Replies (3) of 10479
 
Everyone wanting to know about dilution?,

I've posted this twice now, but I'll do it one more time.

The dilution came from the floorless convertible holders converting their shares at low prices. I'm pretty sure that no more convertibles have been issued since January of 1997, although I may be wrong. Osicom didn't plan on having so many shares added to the denominator of their EPS equation, but the drop in stock price enabled the convertible holders to get tons of shares.

This kind of financing is a death trap to most companies. They give out more shares when the stock price goes down, but they don't get more money. That's why it looks like Osicom should have more money.

We'll have to look at the 10-Q to figure out how many preferred shares are left. As the stock price goes up though, less shares are able to be converted.

If Osicom issues another one of these things, we will have cause to worry about a lot more dilution. Until then, be happy and dream about the Gigamux.

Grant
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