MRV Communications (MRVC) opinions? Message Board

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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: signist who wrote (11071)	10/30/1998 5:28:00 AM
From: Madharry	Read Replies (1) of 42804

I just listened to the replay: My conclusions are that right now the market cap for the company is $198MM, cash is $157MM- the convertible debentures are selling in the market at .50 on the dollar, so the company has potential gains in repurchasing the debt. The company is profitable and cash flow positive. There are around 27MM shares. So cash is around $6 per share. There is another $2 worth of receivables and the converitble debt could be repurchased for around $2 per share. So at $6 the company essentially sells for cash. What is the company's technology and going concern worth? $5-6 now It would seem to me that at these levels it must be an extremely desirable acquistion candidate because it looks like it could be acquired and then the cash used to purchase most of the company, so maybe that's why they are being so conservative with the cash(invested in 3-5 year treasury bonds). Any investment bankers out there? Also Noam probably used the words difficult, challenging, turnaround, competitive pressures, at least 50 times. Maybe he is planning an LBO? As a newcomer to the company- I got the impression that they strongly focussed on the 4th quarter and despite stressing the difficult environment that they expected sequential revenues to be up 5%. It also sounds like they are anticipating a recession in 1999 and hence reducing their projections for profits. I came away with the feeling that mgmt was intentionally being as negatively candid as they could possibly be and do not understand their reluctance to use the cash to buy stock or convertible debentures unless they are planning to sell the company and using the cash on the books as a plum. Franly if this company is not sold within 6 months it would make sense for shareholders to put forth a resolution that the company buy back at least 30% of its shares at hese levels. I was also surprised that none of the analysts got into any specifics on the huge increase in sga expenses and no queries as to how the integration of their latest acquisition was coming along. Whether the restructuring of those operations were on target, whether there were any problems? There were also no specific questions about product delays.

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