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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Todd DeMelle who wrote (25011)	12/5/1999 7:47:00 PM
From: Whitmore G.	Read Replies (5) \| Respond to of 29386

I will grant that cash flow is king in Wall Street's thinking; however, these warrants will effect cash flow in time. Here is the likely scenario. True Ancor gets all of the money up front for the business they do with SUN. Then SUN does more than 10 million dollars in business with Ancor (or this whole exercise about Ancor being a real SAN player is a joke), then the ANCOR stock holds the $60 dollar average for the entire 100 million in business SUN does with them. SUN exercises their options to buy the 1.5 million warrants at the give away option price. GUESS WHO HAS TO COME UP WITH THE DIFFERENCE WHEN THIS HAPPENS. WELL ITS LITTLE OLD ANCOR DON'T YOU KNOW! This WILL effect their cash flow and suck any chance of them being a profitable business right out of them. This deal with SUN creates the curious circumstance where the higher Ancors stock price goes before the warrants are excersised by SUN the more money ANCOR stands to lose when they are exercised! They are in effect paying SUN for the honor of selling to them at a loss. Saying in effect; " here SUN, here is a bunch of money please put our products in your system". It's a great deal for SUN and one that you can hardly blame them for making, that is if the products they are going to be getting from Ancor really end up working to an acceptable degree. What Ancor's real hope is is to use this deal with SUN into fooling the SAN market into thinking they won this contract on the superior technological merits of their products. This is something that can not be further from the truth.