The fact that you can't revel your sources is disgusting. You should not say something like that unless you can back it up. Those kinds of rumors damage these boards and hinder those that come here to learn.
I would find it disgusting if I did reveal my sources. These people wrote to me in confidence.
As for damage, how do you think those who bought TERN at 280 feel?
GG may have made a mistake with TERN. That I don't know. But that is not in the same league as taking a bribe to plug a stock.
That's a big leap. I'm saying I was told he had warrants/shares and subsequently came out with a plug. That's a bit different from saying he took them as payment for backing the company.
Since I've gone out on a limb, I'll pursue the warrant issue to see if I can verify without disclosing my sources.
BTW, here's the pertinent segment from Avanex's 424-B and S-1
THERE MAY BE SALES OF A SUBSTANTIAL AMOUNT OF OUR COMMON STOCK AS SOON AS 90 DAYS AFTER THIS OFFERING BY OUR STOCKHOLDERS, INCLUDING OUR EXECUTIVE OFFICERS AND DIRECTORS, AND THESE SALES COULD CAUSE OUR STOCK PRICE TO FALL
Our current stockholders hold a substantial number of shares, which they will be able to sell in the public market in the near future.
As of December 31, 1999, our executive officers, directors and substantially all of our stockholders, who held an aggregate of 55,391,841 shares of our common stock, or over 97.9% of our total outstanding shares, had executed lock-up agreements that prevent them from selling or otherwise
disposing of our common stock for a period of 180 days from the date of this prospectus, without the prior written approval of Morgan Stanley & Co. Incorporated. These lock-up agreements will expire on August 1, 2000, and an aggregate of 46,129,693 shares will be eligible for sale, in some cases subject only to the volume, manner of sale and notice requirements of Rule 144 under the Securities Act.
Notwithstanding the 180-day lock-up period, 25% of the shares, or 13,847,960 shares, subject to these lock-up restrictions, including 3,644,690 shares held by our executive officers and directors, may be released from these
restrictions beginning 90 days from the date of this prospectus, or May 3, 2000. This release will occur if the last reported sale price of our common stock is at least two times the initial public offering price per share for 20 of the 30 trading days preceding the 90th day after the date of this prospectus.[2/04/00] Of these shares to be released on May 3, 2000, 11,315,945 will be eligible for sale, in some cases subject only to the volume, manner of sale and notice requirements of Rule 144.
*******
One of my sources did the following calculations:
The IPO price of AVNX was $36. May 3 is the 90th calendar day from the IPO date of Feb. 8. Backtracking 30 prior trading days we arrive at March 22 as the first trading day
in the 30 day period within which the stock has to trade above 72 in order to qualify the insider shares for Rule 144 inclusion according to the Form 424BF filing, dated Feb. 4, 2000.
Reviewing the closing prices of AVNX from March 22 forward, we have 17 days from March 22 until April 13 where the stock closed above $72, the cut off price for eligibility for the May 3 lock up. From April 14 thru April 20, the stock was trading below the $72 trigger price. Thus, the company insiders and VC partners would have been highly motivated to do whatever it could to bring the price back
up to the minimum $72, for at least 3 more days before the May 3 cutoff. . I would say that for the company insiders, the Gilder endorsement was a godsend. Is it possible that Gilder could have been unaware of the radically disfavorable position of the retail investor in all this? With market conditions as they are today; without Gilder's intervention, there was very little likelihood, IMO, that AVNX would have been able to fulfill the requirement to maintain its price above $72 for the required 20 days in the qualifying period.
*****
On page 70 of the same SEC document re: Rule 144: ".....beginning 90 days after the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:
- 1% of the number of shares of common stock then outstanding, which will equal approximately 625,293 shares immediately after this offering; or
- the average weekly trading volume of the common stock on the Nasdaq National Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale."
******
These four calendar weeks would be:
April 02-08 - 2.152MM shares traded
April 09-15 - 2.634MM shares traded
April 16-22 - 2.517MM shares traded
April 24 - 5.336MM shares traded
********
From the S-1:
>>>
WARRANTS
At October 1, 1999, there were warrants outstanding to purchase a total of 225,000 shares of common stock and a warrant outstanding to purchase a total of 19,565 shares of Series D preferred stock. The warrant to purchase 19,565 shares of Series D preferred stock will remain outstanding after the completion of this offering and will become exercisable to purchase an aggregate of 19,565 shares
of common stock. It will expire on July 8, 2004, unless earlier exercised.
REGISTRATION RIGHTS
The holders of 23,346,090 shares of common stock, as converted, and the holder of a warrant to purchase 19,565 shares of common stock, as converted, or their permitted transferees are entitled to certain rights with respect to
registration of the shares under the Securities Act at any time after 180 days following the closing of this offering. Under the terms of the agreements between us and the holders of the registrable securities, by written consent of
more than 50% of the registrable securities then outstanding, the holders may require on two occasions that we, at our expense, file a registration statement under the Securities Act, with respect to the registrable securities, provided that at least 30% of the registrable securities would be included in the proposed registration or the anticipated public offering price of the proposed
registration would be at least $15.0 million. In addition, the holders of at least 30% of the registrable securities then outstanding, at any time 12 months after the closing of this offering and at our expense, may require that we
register their shares for public resale on Form S-3 or similar short-form registration, provided that we are eligible to use Form S-3 or similar short-form registration, and provided further that the value of the securities to be registered is at least $1.0 million. Furthermore, in the event we elect to register any of our shares of common stock after this offering for purposes of effecting any public offering, the holders of registrable securities are entitled, at our expense, to include
their shares of common stock in the registration, subject to the right of the underwriter to reduce the number of shares proposed to be registered in view of market conditions.
>>>>>
S-1: sec.gov
Check out the section on major shareholders. At the time of the prospectus, insiders held 90.4% of outstanding shares:
Existing stockholders........ 56,529,320 90.4% $ 44,455,000 17.1% $ .79
New investors................ 6,000,000 9.6 216,000,000 82.9 36.00
---------- ----- ------------ ------
Total................... 62,529,320 100.0% $260,455,000 100.0%
========== ===== ============ ======
GG is not listed by name as his holding (if true) does not represent 5%, therefore it's impossible to verify from public documents. I have it on someone's word and beyond that the only "evidence" is circumstantial in that the lock-up of insider shares and the conditions under which they could be traded early make the timing of his plug extremely fortuitous.
Let me say once again I'm not referring to GG as an individual. I'm talking about his organization.
Pat |
