PSFT - 1999: The "Make-It-or-Break-It" Year? Message Board

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Technology Stocks : PSFT - 1999: The "Make-It-or-Break-It" Year?

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Oct 29 5:00 PM EST

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To: Greg Jung who wrote (297)	3/25/1999 12:53:00 PM
From: Michael Burry	1 Recommendation Read Replies (1) of 1274

Jeezus, Greg, that Q tells me you should not be anywhere near PSFT stock. Learn what a proxy is and use it. The answer: MMTM will burn through its cash over the next 3-4 years. This is a fact in the proxy for issuing MMTM shares. The market (usually, except in the case of net stocks), places a market cap on a stock that accounts for projected cash flows to shareholders - and MMTM has a low likelihood of that. The only time it doesn't do this is if there is a buyout possibility. So why doesn't someone just buy out MMTM and run with the cash? Because PSFT set it up so that MMTM could not act in its shareholders best interests - other companies cannot buyout MMTM to get that cash. So PSFT spun off $250M to shareholders and in doing so turned $1 into 20 pennies. PSFT can buy out MMTM (the "purchase option") but will only do so if MMTM proves very successful. This is purely a ploy to move R&D expenses off the income statement and artificially prop up earnings. Read my article on PSFT on MSN Investor - I've given an overview there. Mike

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