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Microcap & Penny Stocks : International Nursing Services Inc, old (NURS) new (MDIX)
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To: peter michaelson who wrote (854)5/2/1998 4:57:00 PM
From: Mike Moran  Read Replies (2) of 2911
 
To answer your question about the value of the Preferred stock MDIX received, BANH the new owner of the MDIX businesses, is being merged into another public company Numed Home Healthcare (NUMD). MDIX will receive Preferred stock in NUMD. According to the BANH propoganda, when these mergers and acquisitions are complete in September, NUMD as the surviving company, will do about $105 million in revenues. The NUMD business will also make money at higher levels than MDIX did, owing to the fact that they will be cash rich and not need to finance their medical receivables like MDIX had to. If half the propoganda is true, the market should place about a marketcap on NUMD of about $40 million several quarters out.

When (if) converted MDIX will own a 9% stake in NUMD. I think that from an accounting standpoint, MDIX will have to book the Preferred shares at a value that is the lesser of market cap or book value. Book value of the shares at time of merger will be just over $2 million vs. a market cap value of $3.75 million. It would not surprise me to see NUMD buy back the Preferred stock from MDIX a year down the road for a nifty profit to MDIX and a discount to market cap for NUMD.
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