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Strategies & Market Trends : LastShadow's Position Trading

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To: tom pope who wrote (8238)	2/10/1999 4:06:00 PM
From: AlienTech	Read Replies (1) of 43080

>>last nite you posted a calculation for the arbitrage value of LCOS vs USAI, I think it was 2.25. Did you calculate that yourself or did you get it from an article?<< That part was in the press release. But that value is only before the 5 billion in LCOS options get converted. This is in addition to the market cap using just the current stock float. You get 30 shares of the new company for each 100 issued, Then when the options get converted they get another 30 shares, making a total of 60 shares with a float of 130 shares. Great for insiders.. But no one should say LCOS i sonly getting 30% of the new company which is wrong. LCOS is getting 46% (60/130) of the new company. If the value of USAI doubles sorta, LCOS gets an additional 5% of the new company, Making it own 51%. If you really look at it, USAI is getting screwed here. A company that has 100 mil in revenues is buying them up and prob end up owning less than a majority stake in time. Actually one LCOS share is equal to like 0.44 USAI shares. Not the other way around. Its LCOS thats issuing more shares not USAI. But we know what happened to the MALL / UBID arbitrage.

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