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Microcap & Penny Stocks : Microvision (MVIS) -- Ignore unavailable to you. Want to Upgrade?

To: Ronald Kronemann who wrote (2827)	6/8/1999 3:02:00 AM
From: dwight martin	Read Replies (2) \| Respond to of 7721

I am thinking that since there are 6-odd million MVISW out there (not to mention the other special warrant classes), the stock will be diluted by that amount on conversion. I agree there will be downward pressure on the stock price, but I think it may start as soon as the warrants can be called (i.e., after the 20th day, etc.). I will sell chunks of my warrants, convert each chunk to half the number of shares of common, and pocket the change against a possible or probable drop in stock price (when I would consider buying more). While there are those who believe the company will avoid this, it seems at least possible to me that the stock price could even fall to below $24 right after the warrants are called. Even at a stock price of $20, the warrants would still be a good deal for those who paid $8 or less. What is wrong with these thoughts, anyone?

To: Ronald Kronemann who wrote (2827)	6/11/1999 5:54:00 AM
From: kili	Read Replies (1) \| Respond to of 7721

Ronald, Sorry I've been out of touch these last few days, and that responding to your argument for why MVIS 'must' fall back upon conversion comes late, but your calculation cannot stand uncontested: you wrote: It is pretty obvious that the share price will drop after the warrants are called. The calculation is easy: 6.5M shares @ 25 or 6.5M shares @ 30 + 2.2M shares @ 12 + 2.2M shares @ 12 ------------------ ------------------- = 8.7M shares @ 20.97 = 8.7M shares @ 25.45 It's not pretty obvious, and the calculation isn't as easy as you've made it. I'm not addressing the issue of what the exact amount of potential shares there are in the market, as I haven't kept track with the figures (however, I'd be glad for some input on the fully diluted number of shares, based upon both issued shares, warrants and options). There is a fundamental flaw in your calculus. You have mixed the market price on the outstanding shares with the cash amount going to the company without taking the market value of the warrants into account. As we all observe, the warrants are following the shares cent by cent. A holder of the warrants is paying (using the figures above) $15 market price for the right to pay an additional $12 for converting to shares. His/her price for buying a share is therefore (surprise, surprise!) $25. As we all know, there's no such thing as a free lunch. To conclude in regards of your argument: This is not a viable reason for calculating a possible drop in the price once the conversion has been done. If you look at the company profile biz.yahoo.com you'll see that they, in calculating the market cap., use 6.16 mln shares to get to $154 mln. (using $25 as a price example). That is an average figure for the amount of outstanding shares, and is not very interesting for our use. We need to have additional information of the total amount of shares outstanding -adding all warrants & options. That will mount up to the total value the market has put on MVIS. Your calculation uses 6.5 mln. shares and 2.2 mln warrants. Based upon those figures alone, MVIS has a price tag of 6.5 + 2.2 = 8.7 @ $25 => 217 mln. I know I ought to be able to give you the precise number of potential shares since information has been given all the way, but I just haven't got down to it. However, I think the figure is in the region of 11-12 mln. The diluted market cap. of MVIS is really in the region of $300 mln. When fully diluted -and assuming that an amount of approx. 6 mln warrants can be converted @ $12 (please, please help me with some more data here!) -payable to MVIS, thus pushing $72 mln. fresh cash into the system. That in turn, amounts to approx. $6 1/4 per fully diluted share in cash. Not bad at all! Let's keep the figures straight, and hold on the dilution issue, but in real terms. My humble, but firm conviction (which stands until I'm corrected by either one of you) is that the price of MVIS will not move a single cent due to any technical issue concerning the conversion, but might well move due to market/investor positioning before, under and after the conversion has taken place. Kim