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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: killybegs who wrote (9281)	6/17/1999 12:58:00 AM
From: flickerful	Respond to of 17679

HEARD ON THE BEAT: Technology High-Tech Incubators Spring Up in Southland By KAREN KAPLAN It's been a good month so far for high-tech business incubators in the Los Angeles area. Real estate investor Arthur Herring said he and Management Group of Torrance will open a Digital Coast Media/Technology Incubator in Redondo Beach within 60 days. The incubator will be in Herring's AllInternetBuilding.com, which has been outfitted with high-speed Internet connections. Meanwhile, the Hollywood Economic Alliance announced that it received a $100,000 grant from the California Trade & Commerce Agency for its Digital Coast Incubator. The grant will be used to provide seed money to new-media start-ups. Those developments followed the news that longtime Disney Internet chief Jake Winebaum and EarthLink Network founder Sky Dayton will launch their own incubator in Santa Monica and call it ECompanies. Copyright 1999 Los Angeles Times. All Rights Reserved latimes.com

To: killybegs who wrote (9281)	6/17/1999 10:29:00 PM
From: Michael Olds	Read Replies (1) \| Respond to of 17679

You can see the sort of swift thinkers we have here. This is the most englightening post we've had since December 15! I remember reading about this sort of variably redeemable preferreds in the WSJ...there described as close to a scam! The point being these people have a vested interest in keeping the share price down...and a powerful set of tools to do it with. It's worth it for them to short a $3.00 stock. Sell every rise and even buy back after they start panics. They win every which way. They are not limited to the 30 days preceding to influence the price down...like getting a running start, discouraging other buyers. I remember even thinking about this when the deal went down: "Isn't this the same sort of deal that was described by the WSJ?"...and then forgetting all about it after seeing it go up a bit after hitting .75. Jubimer: question (sorry for being so lazy, but you may know off hand) is June 30 the end of it? OK, what am I missing? I should say PS: I own some of this sort of securities myself in another company, where my position concerning it's morality is completely different.

To: killybegs who wrote (9281)	6/18/1999 12:13:00 AM
From: Carl R.	Read Replies (3) \| Respond to of 17679

Interesting. I missed that when I read those reports. I saw that the convertible preferred had to be redeemed starting in 2001, but missed that the redeemable preferred had to be redeemed starting in June. They can pay in cash, but have declared their intention to pay in stock. Thus the holders can aggressively short the stock in anticipation of getting their shares. Nevertheless, this is not a floorless convertible, which is a very, very bad thing, something that can and has destroyed many companies. There are three limits on this issue. First of all, only a small amount is to be converted in any quarter. Secondly Ampex has the option of paying in cash, and a cash payment combined with a strong stock price would foil any systematic shorting. And thirdly the price of the stock is the higher of the fair market value or $2.50, so these holders can't drive the stock below $2.50. Zeev is the resident expert in floorless convertibles. Perhaps he will step in with an opinion. My suggestion to Ed is to in future quarters indicate that he intends to pay in cash, but may elect to pay in stock. This would help to keep the holders off guard and prevent them from shorting (though not from selling after the close of the quarter). Better yet, just pay in cash thus allowing the stock to rise. The best defense would be a rising stock price which makes the number of shares to be issued inconsequential. The other thing I would strongly urge would be to raise sufficient cash so that these can be redeemed in cash. With the price at 4 these holders are entitled to sell 5,000 shares every trading day for the next 10 years, which will slow the rate of increase of the stock. If the price falls to $2.50, they can sell 8,000 shares a day, but at $8 they can only sell 2,500 a day, and at $20 only 1,000 per day. Thus to me the best plan would be to redeem in cash for a year or so to allow the stock to rise from here. Carl