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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Axxel who wrote (12752)	12/3/1999 7:27:00 AM
From: HPilot	Read Replies (2) \| Respond to of 17679

Riskless? No. But what disturbs you most about the balance sheet? The negative book value? That in large part is caused by underfunding of pension funds. Part of it is the old Ampex Media Pension division which was sold to Quantegy. The deal was that Ampex was liable for funding of this fund in the event Quantegy is unable to pay. That liability has been slowly decreasing as pensions have been paid. Or is it the debt? The current ratio is still good. I invested in K-Mart a few years ago for a good profit when others thought it was going under. I based my decision mostly on the fact the current ratio was well over 1. Or the losses? Well hopefully that will be taken care of during the next year or an IPO and Internet status will make that relatively unimportant.

To: Axxel who wrote (12752)	12/3/1999 12:41:00 PM
From: Hal Campbell	Read Replies (2) \| Respond to of 17679

<< skis are waxed >> Had thought you might use Axxel grease. <g> Would love to see them wine and dine ya, Mr. Knutson ( in hopes you would then wax enthusiastic) but I think you are waiting on the wrong company. Their corporate limo is probably a used Yugo - this is a thrifty thrifty bunch. They might send you bus fare to a central pay phone conference call site. No reflection on your skills or prestige- that's just the way they usually are. But, for your sake, I hope they make an exception. The convertibles have a 2.5 floor (if they were floorless we might be at 2 cents right now). They do not constitute a direct bankruptcy risk. Decanted out into the float over many years. If the stock price performs, no sweat. If it doesn't?...steady weight on the price. The portion that was convertible at the holders' option at any price over 4 was exercised during the rally early last winter ( and put a quick halt to it). Mostly all in the float now. The junk bonds come due in a little over 3 years. The royalty flow, which is increasing, not declining, and their fairly large - for a microcap- amount of discretionary R&D .... quickly adjustable in any financial emergency ... provide a decent safety net if servicing the 12% bonds becomes problematical at any point. Right now it is not. But you are certainly correct that cash flow could be a problem . Their plans are ambitious and expensive. Personally, my sole question from the getgo of this exciting new direction has been " where's the money going to come from? " And, of all the good news this year, my favorite item was the 16.7 million royalty deal with a "foreign manufacturer". While they clearly plan to construct a net business that does NOT hemorrhage cash the way so many others do ( and net aficionados would declare that too conservative an approach), they are in need of a source of funds to go full speed ahead. Many options ( the junk bond amount not that great in terms of the way net investment cash is flying around nowadays). If the price should soar, they have a 1.5 million share shelf offering that has been sitting there unexercised for 3.5 years. That's one. There are many others, but my best guess is an IPO or IPOs. WITH a bit set aside - not just an option to buy - for AXC shareholders.( if the redeemable agreement allows that...must call Karen on that hypothetical). The reason I think they would set some aside is that AXC's share price performance will have a large effect on their debt sevice, and the set aside would maximize the IPO's effect on the share price. Me, in microcaps I much prefer pristine balance sheets and loads of cash coupled with depressed prices too. Low risk. If the stock doesn't perform eventually, takeouts usually occur. But the potential upside here continues to beguile this one investor. But risk free? Of course not. I do think we all know that though.