Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: IRWIN JAMES FRANKEL who wrote (2064)	3/22/1999 10:42:00 AM
From: Biomaven	Read Replies (2) of 10280

ij, All shares due to be issued for converts (I don't know if options follow the same rule but think they do) that were under $88 would have to have been counted in the 31.2 million shares. Until a company is profitable based on continuing operations, all the options and convertibles are considered anti-dilutive, and not included in diluted shares outstanding. (If you have a loss, increasing the number of shares decreases the per share loss). In the 10-K that should be filed soon, they should have a table showing the number of shares that were excluded from the calculation because they were anti-dilutive. Note that the dilution calculation uses the treasury stock method, which reduces the dilution by using the proceeds from the exercise or conversion to buy back shares at the average price for the quarter. Thus even if SEPR were profitable, the latest debentures would be barely dilutive, but the employee options, because of their low strike price, would be almost completely dilutive (i.e. a 100 share $13 option would produce around 90 shares in additional diluted outstanding). Peter

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