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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Sector Investor who wrote (16781)	11/11/1999 1:51:00 PM
From: akmike	Read Replies (1) \| Respond to of 42804

Sector-You are right conversion is different than the call feature. Essentially, the owners of the debentures can convert whenever they want. Why would they want to if the price was below or if they are getting income from the debenture and no dividends on the common? Therefore, the callable provision allows the company to force conversion once the share price gets high enough. Best regards, Mike

To: Sector Investor who wrote (16781)	11/11/1999 2:56:00 PM
From: Bridge Player	Respond to of 42804

Re: Isn't the coversion of the debt different from the "callable" feature? To comment further on this point and Mike's response, and quoting from the annual report: "....the notes.....are convertible into common stock at any time after September 1998, at the option of the holder." Call feature: "The Company has the right, after June 2001, to redeem the notes at 102 percent of face value, and after June 2002 for 101 percent of face value." As Mike points out, the redemption right after June 2001 allows the company to force conversion after that date whenever the price of the stock is over $27.04 (subject to some possible price adjustment dependent on certain circumstances), else the holders would lose the value of market appreciation beyond that price. "In November 1998, the Company repurchased $10,000,000 of the notes....." The remaining $90,000,000 of the notes (assuming no further repurchases have been made) have a conversion rate of 36.972 shares of common stock per $1000 principal amount of notes. So if (presumably when) the shares are converted, an additional 3.327 million shares would be issued in lieu of repayment. The net effect on the company would of course be to save them the semi-annual interest cost, in exchange for reducing their reported earnings per share as a result of the increase in outstanding shares. BP