I just posted this onto the Yahoo ESVS thread, in respnose to some concerns. Anybody got anything to add? Appreciate your criticisms. Note: Someone got there before me with the "PartyTime" name, so I had to become Zulu_PartyTime)
What's gonna happen after the
merger?
Zulu_PartyTime
May 21 1998
3:15PM EDT
First off, I don't know exactly what will happen.
I may be good with words, but my baseball coach was my math teacher--always got what seemed to be an
automatic C-grade.
There are a lot of ways Zulu shareholders would win:
A) Zulu shares converted into ESVS shares would mean that these are shares will now be placed onto the
Nasdaq. There's something to be said about getting rid of the OTC market maker manipulation.
B) Regardless of the conversion rate, we will own stock in a company that seems destined to go head to head
with Doubleclick. This is particularly so if, but for any other reason, the vertical integration which Zulu espouses
presents a competitive advantage over Doubleclick.
C) I don't believe the "empty shell" rumor. It's out there, I know. But it is fed principally from the backdrop
created by Wired, Stock Detective and the retinue of naysayers who've parroted these two rags. None of this
has been helpful and has only sowed seeds of doubt. The bottom line is this: Who would want to play the
empty shell game with bluechip clients already on board?
D) The merger cannot take place without ESVS first receiving the audit. I remind everyone that this is not the
only instance where release of an audit has been delayed. There can be all kinds of reasons for this. But it's
unlikely that any entity would perpetually lie over such an important subject. We will see this audit. It will come.
Once it is released, if the revenues for the prior year are confirmed (i.e., Zulu with better revenues than
Doubleclick), there's obviously going to be quite a crowd wanting to buy the Zulu stock. It might even become
hard to get. This will elevate the price of Zulu. Inherently, ESVS should see a simultaneous advantage here as
well, possibly from the institutional side (an institution cannot, in principle, invest in a penny stock such as Zulu).
But I'm not certain about this, since usually the dominant company's price goes down when they merger with a
smaller company. Frankly, I don't know how the 80% vs. 20% formula will affect everything.
E) I simply can't imagine a scenario where the Zulu investors won't be rewarded. The purpose of a publicly
traded company is to function to the greatest advantage of its shareholders. This in mind, I don't see any reason
why Zulu holders would get less. Either the exchange would--at a very minimum--be even or--most likely--it
would be to the advantage of Zulu holders.
In closing, it's somewhat premature to be discussing conversion when the merger hasn't yet happened. But in
order to be best prepared, I recommend that we all go to our respective resources and ask "the experts." I
know there's an expert named Donald on the Bobz -- bobz.com -- Forum. I've been thinking of
doing this myself, just haven't gotten around to it yet. So let's everyone use our resources and see what we
come up with and then make comparisons of what's likely to happen.
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