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Technology Stocks : SYQUEST

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To: Dale Stempson who wrote (6098)4/7/1998 3:00:00 PM
From: hankiba  Read Replies (2) of 7685
 
The dilution argument made the financial press about 2 months ago when they finally got wind of the improved sales. Syqt used to have problems with demand, they corrected this with the Sparq. Then people started talking about supply. This problem appears to have been solved with unit shipments increasing at a 2x ramp rate. The next hurdle is the dilution/warrant conversion issue. What people forget to realize is that for each warrant exercised, the company will recieve an average of $2.80 per share. This has the potential to infuse the company with cash. The number of shares that will dilute the company at the $3 level is 50 million shares. This makes about 135-140 million shares with 100-120 million in cash going to the company. this type of dilution is not the warrant death spiral that many fear. This is great for the company.

hankiba
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