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

To: Whitmore G. who wrote (25025)	12/5/1999 7:59:00 PM
From: Lhn5	Read Replies (1) \| Respond to of 29386

LOL

To: Whitmore G. who wrote (25025)	12/5/1999 8:11:00 PM
From: Carolyn	Read Replies (1) \| Respond to of 29386

Has anyone called the company to ask about this? Would they be required to say if this is true?

To: Whitmore G. who wrote (25025)	12/5/1999 8:40:00 PM
From: Patrick Sharkey	Read Replies (2) \| Respond to of 29386

Whitmore, I have a very different understanding than what you just said about the impact of SUN's exercise of warrants to purchase Ancor shares at less than current market price. You imply that Ancor must somehow pay out cash representing the difference between the exercise price and then-current market price. That is not correct. Instead, the result is that more shares will be outstanding and issued, causing a minor dilution for less than the fair market price. In fact, SUN will have to pay Ancor to issue the shares, so additional cash will be received by Ancor when SUN exercises the warrants. In think that you know this, and your last line, in bold, suggests to me that you you have a short position. The majority of the rest of the market knows the true facts concerning the issuance of the warrants. By the way, do you know the person who posted #25028, who asked a question which suggested that information which you posted was accurate?

To: Whitmore G. who wrote (25025)	12/5/1999 8:50:00 PM
From: Jim Withers	Read Replies (1) \| Respond to of 29386

Whitmore; You couldn't be more wrong. When (not if) SUNW uses 100 million worth of ANCR switches, then exercises its warrants and purchases 1.5 million shares of ANCR stock that's the end of the transaction. Period. If SUNW wants to cash in those shares, fine. They must sell them in the open market just like I would have to if I held the shares. I don't get where you and others are coming from with your concerns over these warrants other than the dilution. BIG DEAL! Lets pretend SUNW does 100 million with ANCR in 2000. What happens? Lets say ANCR doesn't do another nickle worth of business outside of that (LOL). Guess what. ANCR would be profitable. That's right, even if SUNW exercised all of their warrants. How so you ask? Well lets say ANCR's costs per quarter run about 8 million (about double from current costs). Also assume a 40% margin (less than current margins). That would be a profit of about 8 million. The only difference from SUNW exercising its warrants is that now the profit is spread among 34.5 million shares instead of 33 million shares. Still a profit and not a significant per share earnings difference if you ask me. About $.23 per share vs. $.24 per share. That's it. That's how it works. Where on earth did you get the impression ANCR had to make up the difference between the $7.30 warrant price and the stocks trading price? And, oh yes, another 10 million for ANCR's coffers. Cheers JIM

To: Whitmore G. who wrote (25025)	12/5/1999 9:26:00 PM
From: Technocrat	Read Replies (1) \| Respond to of 29386

You are incorrect regarding cash flow. There is no net loss to Ancor's coffers; the cash is positive due to the exercise price. However, there is no free lunch because the stockholders lose by way of dilution. Presumably, this has already been built into the price of the stock as it currently stands. If the warrants were not there, the stock would be about 64 instead of 60. Everyone assumes Sun will exercise them. If you want to play some head games, try thinking about the case of 1.5 million shares (now 3 million due to the stock split on Friday) optioned to Greg Reyes, the newbie CEO of Brocade. How much bigger deal is this than the Sun warrant business? About five times bigger by my count. Shareholders of Brocade are paying the freight with a big smile on their faces just like Ancor's are regarding the warrant deal with Sun. << use this deal with SUN into fooling the SAN market... >> Sounds like you have an agenda. The easiest way to decide whether a deal is a good one or not is to ask the obvious, pointed question: If Vixel or Brocade could have cut the same deal with Sun, would they? The answer is a most emphatic "YES!!!" Reyes would have killed for that deal which he could have paid out of his own pocket and still made a bigger bundle than he has now.