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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Walter Morton who wrote (6728)	7/23/1999 9:24:00 PM
From: JimC1997	Read Replies (2) \| Respond to of 18366

Walter, Thanks for publishing the list from the S-3. The majority are the older preferred stock investors who are finally preparing to cash out. This makes sense for them, in that the stock has been in a narrow channel for two months now and they probably want to move into new venture capital preferred deals. These people by nature are not long-term shareholders. They take advantage of the opportunity to generate high returns from companies desperately in need of cash by purchasing convertible "death spiral" preferred stock and then cash out and repeat the process. They are necessary to the kind of company that e.Digital was two years ago, but no longer needed now that it can sustain itself on revenues. I see that Woody is taking some profits, but not making a very sizable a dent in his potential holdings. (I think that most of those are options he can exercise, rather than current shares.) And Bob Putnam is getting ready to reward himself for his work over the past few years. I suspect that his motive is more to diversify his assets. (It gives me some personal satisfaction to know that I now own more stock than two of the current board members. But then again, so do several others who read these message boards.) My only real concern is that the sale of the shares will have to be managed carefully or they could drive down the price of the stock to the $1.50 to $1.75 range and shake out more of the nervous $3-basis shareholders. That could cause a cascading effect. Another point to consider is that the registration statement merely brings the stock to a state of "readiness", after which the shares may be sold. The actual sale may not occur for some time. In the case of the preferred holders now preparing to sell, it is a standard condition of such financings that the company prepare a registration statement to permit the eventual sale of the stock when the investors convert. Woody and Putnam may have chosen to submit their shares for registration at this time simply because it is time-consuming and somewhat expensive to prepare registration statements and holding off until they were personally prepared to go to market would serve no useful purpose. Jim

To: Walter Morton who wrote (6728)	7/27/1999 1:06:00 PM
From: Walter Morton	Read Replies (1) \| Respond to of 18366

bob, who is Richard & Mary Daniels? Do you know who James & Josephine Zolin are?

To: Walter Morton who wrote (6728)	7/27/1999 1:21:00 PM
From: Walter Morton	Read Replies (2) \| Respond to of 18366

<Includes warrants exercisable into 10,629,042 shares of common stock> So, we know share outstanding will increase by at least 10 million shares within the next 60 days. Now, why exercise the warrants now? Do they expect the stock to drop after 60 days and they want to get out before that happens? Do they expect the stock to go up in around sixty days and they want to be able to sell at that high price before it falls again? Did they all simply have the same deadline for exercising their warrants?