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Technology Stocks : p-com (pcms)

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To: Apakhabar who wrote (1092)	5/21/1999 3:14:00 PM
From: Bernard Levy	Read Replies (1) of 1461

Apakhabar: The Nasdaq has a restriction which prevents companies from increasing their number of shares by more than 20% without requesting the stockholders approval. Given there are about 44 million shares outstanding, this gives the current limit of 8.7M shares you are talking about. PCMS has indicated it will seek the stockholders approval to issue 13 million shares, which it thinks will be enough to deal with the converts. If the stockholders refuse and PCMS shares fall so low that more than 8.7 million new shares need to be issued, the preferred convertible holders have the right to force PCMS to move to OTC, since the 20% stock issuance limit does not exist OTC. Regarding the December/January price action, I would like to point out that both my posts and Zeev Hed's posts predicted the stock would first go up, and that the danger would occur only after the converts would become floorless. While reading the 10Q, I noticed something interesting happened in December and January: about $40M of the series A preferred stock was converted into common stock and redeemed.Note that the series A is not floorless. This decreased PCMS's total indebtedness from $200M to about $160M (rough numbers here). Good luck, Bernard Levy

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