Disturbing!
Thanks signist for the scoop! There were a number of things that caught me by surprise!
First, <<<"USE OF PROCEEDS...........The Company will not receive any proceeds from the sale of the Notes or Conversion">> Where is the money going, and for what?!
Second, it sounds like there is a $2.5 million interest payment due next week on the 15th! Also, the whole thing about unregistered transfers to persons believed to be "qualified institutional buyers" stinks! Read the following carefully!
<<<"This Prospectus relates to the resale from time to time by the holders (the "Selling Securityholders") of up to $100,000,000 aggregate principal amount of 5% Convertible Subordinated Notes due 2003 (the "Notes") of MRV Communications, Inc., a Delaware corporation ("MRV" or the "Company"), and the resale of shares of Common Stock, par value $0.0034 per share (the "Common Stock"), of the Company issuable upon the conversion thereof (the "Conversion Shares"). The Notes were originally issued by the Company in a private placement completed on June 26, 1998 to the Initial Purchasers (as defined). The Notes were resold by the Initial Purchasers in transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in the United States to persons reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act.
The Notes are convertible into shares of Common Stock at any time on or after September 21, 1998 and prior to the close of business on the maturity date, unless previously redeemed or repurchased, at a conversion rate of 36.9720 shares of Common Stock per $1,000 principal amount of Notes (equivalent to a conversion price of $27.0475 per share), subject to adjustment in certain events. See "Description of the Notes -- Conversion Rights." The Company's Common Stock is included for quotation in The Nasdaq Stock Market's National
Market (the "Nasdaq National Market") under the symbol "MRVC." On December 8, 1998, the last reported sales price of the Common Stock in the Nasdaq National Market was $6.50 per share.
...Interest on the Notes is payable on June 15 and December 15 of each year, commencing on December 15, 1998.">>>
Thirdly, who knew that they did not hold a single patent...not me!?! <<<"PRESENT LACK OF PATENT PROTECTION; DEPENDENCE ON PROPRIETARY
TECHNOLOGY. The Company holds no patents and only recently has filed two patent applications and a provisional patent application in the United States with respect to certain aspects of its technology. With the Xyplex Acquisition, MRV acquired five additional provisional patent applications filed by Xyplex on certain aspects of its technology. The Company currently relies on copyrights, trade secrets and unpatented proprietary know-how, which may be duplicated by others.">>>
All this skepticism is from one reading of the filing, but I've come to trust my initial feelings! Does anybody see this as a death spiral financing? Who would want the right to earn only 5% on your money for a convertible note on a stock that is trading at only 22% of the conversion price?! I won't even touch the $1 million "key man" insurance policies on all those execs...who the hell is after them anyway?!
Something just isn't right about this and I, along with the market apparently, will be reevaluating my whole premise regarding MRVC!
$tarpopper
ps. I would be very interested in Dan Spillane's take on this! |
