Yamakita, re. TERA, yes, at a quick look it appears to be an
attractive broken stock with a timely convertible.
It's a development stage co., so it burns cash as you noted. Hence,
they did the discounted convertible deal you mentioned.
Factors not favoring shorting based strictly on the convertible: The
principal amount is $6 M, which represents 6% of market cap, which is
a smaller-than-average deal. The conversion price is a zero-percent
discount with a five-day-lookback, which is much more favorable terms
than the average deal.
On the other hand ...
the timing for the convertible might soon be about right: the S-3 was
filed July 30. The S-3's 'plan of distribution' says the sellers are
allowed to short. The selling shareholders Advantage and Genesee are
familiar. While the convertible deal is smaller than average, I
suspect that they will have to follow up with more deals, since the
$6 M is only 5 months worth of cash burn.
I've pasted a Market Guide report below:
Company Market Guide Quick Facts Report
Tera Computer Company SYMBOL: TERA EXCHANGE: NASD
PRICING DATA (AS OF) 08/14/98 RATIOS & STATISTICS
Price 8.88 Price/Revenue (TTM) 60.56*
52 Week High 18.19 P/E (TTM) NM*
52 Week Low 7.63 Price/Book (MRQ) 23.53
Beta -3.51 Price/Cash Flow (TTM) -4.28
Avg Daily Vol (10 Day) 0.11 Mil ROA (TTM) -117.11%*
Avg Daily Vol (3 Month) 0.09 Mil ROE (TTM) -353.17%*
Current Ratio (MRQ) 3.49
DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.08
Indicated Annual ($) 0.00
Yield 0.00% NOTE: TTM = trailing twelve months
MRQ = most recent quarter
SHARE RELATED INFORMATION SHORT INTEREST INFORMATION
Market Cap. ($) 103.207 Mil Current Month 0.666 Mil
Shares Out. 11.629 Mil Previous Month 0.542 Mil
Float 8.700 Mil Short Interest Ratio 6.3 Day
INSTITUTIONAL & INSIDER OWNERSHIP
PURCHASES SALES NET PURCH %OWNED
Institutions (3 Months) 0.102 Mil 0.000 Mil 0.102 Mil 1.0%
Insiders (6 Months) 0.000 Mil 0.000 Mil 0.000 Mil 25.2%
BUSINESS SUMMARY Tera Computer Company is a development stage Company
that designs, develops and markets high performance general
purpose parallel computer systems. For the three months
ended 3/31/98, revenues totalled $21K vs. $0. Net loss
applicable to Common rose from $2.4M to $5.2M. Revenues
reflect the subcontract with San Diego Supercomputer Center.
Higher loss reflects increased R&D expenses due to the
completion and testing of the initial MTS system.
*PRELIMINARY: For the quarter ended JUN 1998, revenues were
1,527; after tax earnings were -4,299. (expressed in Thousands)
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1995 1996 1997 1998
MAR 0 0 0 21
JUN 0 0 0 1,527*
SEP 0 0 0
DEC 0 0 74
TOTAL 0 0 74
EARNINGS PER SHARE
MAR -0.360 -0.900 -0.360 -0.460
JUN 0.170 -0.790 -0.550 -0.370*
SEP -0.670 -0.410 -0.460
DEC -1.270 -0.350 -0.610
TOTAL -2.130 -2.450 -1.980
7/97, Company issd. 2,838,665 for warrant redemption. |
