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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (9044)	7/5/1999 12:39:00 PM
From: Rande Is	Respond to of 57584

. . . . . . Things that make you go HMMmmmmm.m.m.m.. . . .?? ? BDE. . . I understand WHAT a floorless situation and WHERE it can send the stock price. I see HOW predatory short positions breed other short positions, WHEN a stock is in a floorless situation. I cannot understand many of the WHYs associated with BDE, however. First, WHY go to loansharks when a bank will do? Do they KNOW these players and wish them to benefit? Or did this group make Brilliant an offer they could not refuse? Second, WHY does a company short of money "exercise their rights" to buy a company that is losing money like crazy? ? ? ? ? ? ? We intend to acquire at least 85% of the common shares of Trojan by exercising our right to close a share purchase agreement with the majority shareholders of Trojan. Trojan Television [Auction Channel] Trojan was founded in 1996 and commenced operations in July 1996. Trojan had net losses of approximately $310,000 in fiscal 1997, $521,000 in fiscal 1998 and $1,289,000 for the nine months ended March 31, 1999, and an accumulated deficit of $2,119,000 as of March 31, 1999 relating to net losses from the period from July 1, 1996 through fiscal 1997 and 1998 and the nine months ended March 31, 1999. We expect that Trojan will continue to sustain losses at least for the next twelve months. There can be no assurance that Trojan will achieve profitability or successfully implement its business strategy. . . .the Trojan acquisition is expected to result in significant goodwill on our balance sheet. As a result, we expect that our amortization expense will significantly increase over historical levels. This increase in amortization expense will have an adverse effect on our results of operations in the remainder of 1999 and in subsequent periods. Does owning Trojan/Auction Channel fulfill some grander scheme? Do they really think they can afford if financially? Or do they also KNOW the heads of this company, with which they have had some sort of relationship for some time, do to the rights they had acquired at some point in the past? Could it be that whatever is coming for BDE [acquisition major money investment or other]. . .would benefit Trojan/Auction Channel in a major way, too. . . .so spending shares and money and buying them was considered "no problem"? Or do they just figure, "hey. . . we are diluting the stock anyway. . . what's a few more to finish out that acquisition?" Third, WHY all the disclaimers in the filing with stock registration? And why include indemnification of execs and directors of BDE from lawsuits? These disclaimers are typically reserved for a 10k filing. Why does BDE feel the need to disclaim so many different areas at once? Do they realize that the intent of these shareholders is to drive the price down for conversion at a low price? Are they then "expecting" a sudden price decline and the lawsuits that often accompany such a move? If so, it would seem that "hedging" our long positions with short ones, may be in order. . . . or some timing of the conversion may be in order, depending on the size of positions accumulated. I like Zeev's idea of monitoring the share count at the transfer agent weekly [perhaps more often this first week]. . . to get an idea of what we are facing. Either way. .. .the QUESTIONS bring added risk with them. . .making the play riskier over 4 dollars. . . . those holding long from 3 or under, may choose to ride out the storm . . not sure. . . but those that entered over 6 will have some real heart searching to do this week. Rande Is