Mary, I applaud your efforts this weekend, and I apologize for being rough with you in particular before- I mistook you for a rookie tout and nothing more, but your efforts this weekend have earned my respect; you pulled back and sought out independent opinions and tried to learn something. Well done, and I mean that sincerely.
As to the issue of whether or not a true floorless financing is involved here is not crystal clear to me at the moment after further remarks- there are a lot of further clauses and contingencies involved that need to be reviewed- I still think it is a floorless, but it's not at all clear, and I've gotta go to bed <g>. Earlier I gave a simplistic answer, and the post you pointed out gave a good simplistic response to counter it- I'm looking further, and right at the moment what I can say is at the least there are features that are importantly similar to a floorless. But I also want to make a more important point- let's assume for the purposes of argument that this is not a floorless. That doesn't change my opinion because frankly, it's unlikely IMO that this would ever death spiral unless Apollo for some reason backed out entirely, which I also think is unlikely; this is a risk to be discounted in the price, but small. IOW, I wouldn't short this on the belief that this is going to zero with endless dilution- in theory, of course it could happen, but I don't expect or predict that, and I think that's probably the opposite kind of dreaming from that of the longs who think this is the next CMGI. IOW, the first isn't a good short argument, the second isn't a good long one. Either one could turn out and I'd be wrong in my expectations, but I still think I'd be right that this is still a decent short (for me).
But what is also clear to me is that this $6 M financing was not that of a healthy company, and that's the big point; that there were basically the darkest shade of red flags that you find (call 'em crimson) financially right before Apollo stepped in to provide supposedly wonderful financing. Come on!!!! It's easy and desirable to hype a $75M deal (see the 4/15/99 144 filings), but the real value in such a deal entirely depends on the features that we won't know until we see the document. It's easy to sucker folks in without details available. You see companies all the time crowing about private placements they received, but everything lies in the precise terms to determine if it was a healthy arrangement for the company or simply devastating, whether it signals a legitimate interest on behalf of the private placement purchaser for the company to succeed or whether it instead is a license to rape and pillage.
Good luck with this, Mary, whatever you decide.
Sincerely,
Anaxagoras |
