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Technology Stocks : Nam Tai Elec. (NTAI)
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To: Ron Bower who wrote (1332)4/2/1998 11:10:00 PM
From: mod  Read Replies (1) of 1696
 
<<4) Presuming the company bought the shares, the shareholders benefit>>

Ron,

I think I disagree with you on this point. The company just sold the units for $17 recently, minus $1 commissions and expenses for a net of $16. Let's say they in effect received $14 for the stock and $2 for the warrants. So Nam Tai just paid $17 to buy back something they sold a few months ago for $14. As a result, the company lost $1.5+ million on that trade. That $1.5+ million was just transferred from the company to its CEO yesterday. The company would have been better off not issuing those shares in the first place.

In the offering, Mr. Koo agreed to not sell his shares for 90 days. He sold about 120 days after. He just said no further sales are "contemplated" (not a legally binding commitment,IMHO) for another 90 days. What do you think will happen when those 90 days are up?

Dennis
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