To: V$gas.Com who wrote (40051 ) 3/5/2000 2:26:00 PM From: ztect Respond to of 44908
Okay...okay..I got work to do...and hopefully won't keep finding relevant info to share... Historically r/s's suck, they are done out of necessity and not as a precondition to obtain $40 mil of financing. Below is a more typical historical situation for necessitating a r/s. A situation such as the one described below, and the example I give from my own experiences, is why r/s's have such bad connotations. I have only had the pleasure in 1992 once before of going through a 1 for 7 rs a with a agricultural biopesticide biotech company called Ecogen. Ecogen saw its share price slip from 12 to 1 . (I was in a 6) The rs pushed the price up to 7 and kept the company from becoming delisted. Though the company's fundamentals didn't improve, and the price sunk to 1.5. The company is still in business unlike a lot of other biotechs of its era, but has only recovered to a price of 3.5 or so last time I checked though IMO is worth a lot more. Here's the other example: "Some stock news? The Vancouver-based parent company of Elephant & Castle, which owns 23 North American pubs, including two in Philadelphia, has been put on notice: If the share price does not rise above $1 a share by March 17, Nasdaq has said it would delist it. The company said it was considering a 1-for-2 reverse split. In government filings, the company has singled out the Franklin Mills location, which it opened in November 1998 as a joint venture with Alamo Grill, as a clunker. Its losses are "of such a magnitude that they mask the significant improvements in operating margins made in the rest of the company," it reported to the Securities and Exchange Commission in September. The stock has been lower than $2 a share for a year now." Tsig.com may rs for a listing on nasdaq (as opposed to becoming delisted) to obtain financing in hand contingent upon that restructuring (rather than as an attempt to attract financing). Tsig.com fundamentals are improving and are only going to expand with money well in excess of what is needed to cover the current burn rate. People are comparing sour grape to apples, and shouldn't necessarily be swayed by historical precedents that are NOT pertinent especially in what is an evolving market whose rules have been changed by the digital economy. z