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Technology Stocks : Racom Systems (RCOM)
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To: Marty Lee who wrote (281)8/30/1998 3:20:00 AM
From: Gutterball  Read Replies (3) of 468
 
I received my proxy today. After giving it consideration I'm voting "NO" on both counts. Primary reason, the price of RCOM stock. Besides, Racom has never said how much money it intends to raise. If low prices persist, 20 million shares won't get much more than $15 million in paper while wee investors get the ream.

Granted, Racom needs money but they must find a way other than easy S-3 financing to meet their goals. They could gerrymander existing shares. Racom could buy back to get price up. They could purchase on the open market as well as from Ramtron and Intag to get the shares required for an equity placement -- if a buy-in is in the works. The end result would be a higher price and fewer shares to place. Ramtron could even make a bridge loan to get the required number of shares. However, I'll let Racom's egg heads and bean counters figure a way.

This will be a defining moment in Racom's history. Racom needs to be looking for ways to increase price as well as raise money. Remaining below a buck will be detrimental. Once price is up and stabilized, then I'd be in favor of Racom authorizing more shares for a secondary offering or something.

Of course, I know how a bean counter thinks. He'll say, "it's on the table, lets get it!" That way, he can spend the rest of the year lining his beans up in nice neat little rows.
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