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Technology Stocks : The Panda Project (PNDA) -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (1515)	4/21/2000 7:02:00 PM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 1521

Can you explain what you meant by this: They now hold a small position in a company of small (but questionable and difficult to determine) worth, have no operations, exist chiefly for the purpose of holding that investment Recall that about a year or so ago Panda decided to sell "substantially all assets and intellectual property" to the newly formed "Silicon Bandwidth", in exchange for SBI assuming many (but not all) of Panda's liabilities/debts. Panda would also receive 10% of the equity of SBI, in the form of preferred shares in it. SBI was to be "capitalized at $6M", but was not a publicly traded company. Taken at face value, this would suggest that Panda's equity stake in SBI would be worth about $600K, though whether it would be worth more or less, and whether that value might be easily realizable, would of course be open to discussion. Panda acknowledges in their most recent 10-K that they will essentially exist for the sole purpose of holding this investment (passively). They had 20-ish employees at 31 Dec 99, and 5 employees as of the 10-K filing date, and stated that they intended to have fewer employees (2 or 3?) Real Soon Now. Shortly thereafter, Stanford and Melissa Crane resigned. I have serious doubts as to whether this preferred equity stake in SBI has any real value, and I question why such a complicated deal was fabricated -- why not just acknowledge a year or two ago that the jig was up, and fold the whole thing up? Unless you happen to still be short the stock and have a secure borrow, in which case you might be able to defer recognizing that PNDA stock is "substantially worthless" for some time yet. It's a pretty thin market for that stock though... Reading the various sequences of events and discussions in the 10-K is really, really interesting reading for anyone who has analyzed and followed the company in the past. There's a certain amount of schadenfreude in it all I suppose, but this is certainly a case of where we shorts were 100% dead right on just about everything. One thing that suprised me and still baffles me though is the significant complexity of various stages of the story -- there are a lot of plot twists that either I simply do not understand (or perhaps they truly are irrational??). One for the books, that's for sure. - Daniel