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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: Pi who wrote (1307)	11/4/1999 9:05:00 AM
From: Dutch	Respond to of 2702

Please tell which stock has the 10% downside and the 110% upside. That is my kind of investment. Maybe QCOM or ARMHY, the valuations coupled with the the NAZ at an all time high make me a little nervous. VARL is my only small cap and or value play. If you are not nervous about an investment it probably means your not following it very closely. IMO. Please let me in on your 10 for 110 pick(s). TIA Dutch

To: Pi who wrote (1307)	11/8/1999 8:37:00 PM
From: akmike	Read Replies (2) \| Respond to of 2702

Pi-There has been some dilution, no doubt, but I thought it might be instructive to determine the source and the amount thereof, rather than attribute too much to the stock option plan. As of 12/31/96 there were 3,806,138 outstanding shares. In l997 VARL issued convertible debentures and warrants to raise 7,500,000. The debentures had a conversion feature which enable holders to convert at 84% of the 10-day average closing bid price prior to conversion. There isn't anything constructive today to discuss the potential therein for larceny on the part of the bondholders-the price of the stock went down and the result was conversion to 1,264778 sh. at a cost/sh of less than $6.00. That left 750000 warrants outstanding which can be converted to stock at a price of 9.50. In l998 130000 warrants were converted. As proceeds of the debenture provided for the new automated pick and place manufacturing this was necessary expansion financing. As fully-diluted shares were 6096000 on 9/30/99, it appears that 2014000 of the 2289862 increase in shares over the last 3 years is related to the financing and not to employee compensation plans. There was an unusual jump in the diluted share count during the last quarter but I believe it was entirely related to the increase in share price which made the warrants and/or options now dilutable where they weren't at lower prices. In light of the above, maybe you would reconsider that too many shares have been issued under the stock option plan? The good news in the above story is that the new manufacturing equipment should produce the necessary revenues to finance additional capacity, thus obviating the need for additional stock dilution for growth financing, Best regards, Mike