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Technology Stocks : IRID - Iridium World Communications IPO Announced! -- Ignore unavailable to you. Want to Upgrade?

To: Marty Rubin who wrote (2284)	8/6/1999 9:40:00 PM
From: Olsinvest	Read Replies (3) \| Respond to of 2693

Anyone know how this is affecting the price of irid? Ole

To: Marty Rubin who wrote (2284)	8/8/1999 10:09:00 AM
From: Jon Koplik	Respond to of 2693

Thoughts from someone who still thinks IRID will go to near $0.00 a share. (Sorry, but that is what I think). The real killer in the latest news was the following : Service payments on the remaining one third of the total debt will be made with cash or common stock. In addition, future interest payments on the convertible bonds will be paid in common stock at a slight discount to the market or payments in kind, the investors said. The whole rest of the news on the framework for carving up Iridium between current equity holders and current bondholders seemed surprisingly lenient to the the equity holders. I am used to the attitude of "Hey, without us bondholders budging, you've got 'zip.' You're lucky if we give you ANY ownership piece of the newly reorganized entity !" (Explanation for those who did not take "Corporation Finance 101" at business school -- if any part of a bond promise is defaulted on, then IT IS OVER ! The equity holders have zero, the bondholders have 100 % of whatever is left of the company at that time). These payments in stock can be extremely dilutive in a very short period of time. The company would need to do brilliantly, very quickly, or there would soon be zillions of common shares outstanding. Jon.