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

To: Greg Hull who wrote (26033)	2/8/2000 3:14:00 AM
From: Eric Somers	Read Replies (1) \| Respond to of 29386

Greg, From a philosophical viewpoint I agree with everything that you say. I think it makes more sense to give options, at FMV, with a requirement that the potential partner participate in the partnership in order to exercise, than to simply sell the shares at FMV. BUT, given the GAAP rules, and the fact that the SAN market is very competitive and very early stage, I have to disagree. If giving up the equity hurts the GAAP results, and raises issues regarding the company in general (witness the unending talk that ANCR had to give its switches away), that will/has hurt the share price. ANCR would only be a more attractive take-over candidate because the share price would not reflect the actual value of the company. I believe that Ken and Steve had only the best intentions when they did the SUN warrant deal, but I really think/hope that if the opportunity rose again, they would simply sell the shares (see INTC). The warrants, whether right or wrong, have without a doubt hurt ANCR more than they have helped ANCR (not the deal with SUN itself, but the structure of the deal). The company would have been better off to put it behind them and have SUN as a simple shareholder with associated dilution. Just my thoughts (with the benefit of hindsight). Cheers, E