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Technology Stocks : MRV Communications (MRVC) opinions?
MRVC 9.975-0.1%Aug 15 5:00 PM EST
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To: WebDrone who wrote (8264)4/21/1998 9:05:00 AM
From: CF Rebel  Read Replies (1) of 42804
 
Richard Moran:

I don't know if I can help you. I just threw those facts out there to see if anyone would be able to make sense out of this. Other things of note, though:

Total warrants that Whittaker gets is 500,000 - 78,598 of which is awarded upon "timely performance of certain covenants."

MRVC will write off 9,500,000 in goodwill over the next 7 years. This is to be written off at 1,350,000 per year. I'm wondering what percentage of the total write-off this figure is and whether reduction on stockholder's equity plays a part.

Other things that I think may play a part in the write-off is management's valuation of the intangible assets - sales channels and intellectual capital. Management is surely laying off lower level Xyplex employees, of which there were too many given revenues - any restructuring charges here?

I rode through an incomprehensible three-way merger with SoftKey Int'l. (now The Learning Co.) in 1993 and the stock went down 80%, I think mainly due to investors not knowing what to expect. I think that the Xyplex acquisition is pretty straightforward, very symbiotic. Because the match is understandable, stock price has been unaffected. The only question to me is the extent of the write-offs and the logic underlying it.

Whatever the write-offs, I feel good about this acquisition. Any thoughts anyone can contribute are welcome.

CF Rebel
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