Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Integrated Circuit (ICST) anybody got a clue? -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (161)	5/23/2000 8:47:00 PM
From: KevRupert	Respond to of 168

Great analysis link: Link discusses management, financials, detailed analysis of company, and competition. Profitable company in a fantastic sector! worldfinancenet.com

To: ratan lal who wrote (161)	6/1/2000 7:56:00 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 168

Same company, diluted stock. A nice way how to skin a cat. Note that the book value of the old company was over $95MM and ICST has been profitable for years. As of February 3, 1999, there were 12,113,500 outstanding shares... so the book value on the 12M shares was around $8. sec.gov In 1999 they bought out all (98%) shareholders at $21.25 - and loaded the company with debt so that the equity was a negative $100MM. Proceeds of about $256MM went to the existing shareholders and for vested options. They called that procedure "recapitalisation" (???) Now it is different: Shares Purchased Total Consideration ------------------ --------------------- Average Price Number Percent Amount Percent Per Share ---------- ------- ------------- ------- ------------- (in millions) <S> <C> <C> <C> <C> <C> Existing shareholders... 51,751,564 80.5% $ 63.3 28.0% $ 0.82 New investors........... 12,500,000 19.5 162.5 72.0 $13.00 ---------- ----- ------ ----- Total................. 64,251,564 100.0% $225.8 100.0% ========== ===== ====== ===== sec.gov Now the company has 64.2MM shares and I don't see what is different with the "new" ICST. Outside shareholders have less then 20% of the stock and the cash raised in the IPO is immediately used to repay the debt leaving the company with less cash than it had in 1999. In other words: From 256MM they paid (for 98%), the IPO brings back around 162MM - for 19.5%. Add the 30MM that some venture capitalist injected, and add some operating earnings ICST had during the year, and you end up with 95MM - 96 MM + 30 + 30 == 59MM equity. The stockholders equity is now 55MM, down 40MM from the 1999 value. Looks like it is overvalued by a factor 4 to 6: -it has been taken out at 2.6x book or 6x operating income -now it trades at 18x book or around 24x operating income. etc. existing stockhodlers paid only $0.82/shr. An interesting way to "repurchase" a company (ie hold 80%) without using significant money. Thumbs down.