Hi again.
Here's what I've done. I checked more than a half dozen filings for INKT searching for the phrase 'lock'. It's not common to find this outside of registration statements, but I wanted to be sure so I also checked a 2/12/99 10-Q, the 12/24/98 10K, and the most recent proxy, DEF 14A. Heck, I even checked an S-8, a post effective registration ammendment(POS AM), and a current report (8-K), just for kicks. Nada. Not a single mention about lock-ups (I didn't expect there to be). So that means you go to the registration statements where they have to mention it.
Since I had already checked the final propsectus for the IPO last time around, this time I went to a more recent final prospectus for a different deal back in Novemenber. Then the company sold some shares (300K) for working capital wherein some employees and insiders also sneaked out of some shares (2.7M). The 424B-4, the final prospectus for that offerring, says this about lock-ups, which is basically what I said in my earlier post:
<<Upon completion of this offering, Inktomi will have outstanding 23,688,372 shares of Common Stock (based upon shares outstanding as of September 30,1998), assuming no exercise of the Underwriters' over-allotment option and no exercise of outstanding options or warrants after September 30, 1998. Of these shares, the 3,000,000 shares sold in this offering will be freely tradable without restriction under the Securities Act except for any shares purchased by "affiliates" of Inktomi as that term is defined in Rule 144 under the Securities Act. In addition, the 2,592,100 shares sold in Inktomi's initial public offering in June 1998 and 791,540 shares released from the lock-up
agreements executed by certain stockholders in connection with the initial public offering are freely tradable.
The remaining 17,304,732 shares of Common Stock held by existing stockholders are "Restricted Shares" as that term is defined in Rule 144 and may not be sold publicly unless they are registered under the Securities Act or are sold pursuant to Rule 144 or another exemption from registration. On December 8, 1998, the lock-up agreements relating to Inktomi's initial public offering will
expire. On this date, approximately 3,535,655 Restricted Shares will be eligible for resale, subject in some cases to compliance with the volume limitations and other restrictions under Rule 144. In addition, on December 8, 1998, the lock-up agreements will expire as to 384,351 shares held by employees of Inktomi. However, these shares are subject to a right of repurchase in the event of termination of employment. The repurchase option lapses over time in accordance with the vesting schedule for each employee. As the repurchase option lapses, these shares will be eligible for resale in accordance with Rule 701.>>
I don't know how much clearer things could be. My conclusion is that the journalist messed up.
I would be very grateful if someone were to correct my misunderstanding, but I think I'm correct. I'd feel a lot better if I at least could explain why the journalist said what she said- in order to make sure someone is making a mistake, it's not enough to have grounds for thinking that your answer is correct, but you also need to understand the grounds of the other person's claim, and I don't have that here.
Hold on to your shares. TheStreet.com is pretty influential on day traders, and so it wouldn't be too shocking if a misunderstanding contributed to the weakness. INKT is bidding up in premarket, as it should.
All IMHO.
Anaxagoras |
