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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Jim Spitz who wrote (34486)	9/6/2001 11:15:03 AM
From: Jim Spitz	Read Replies (1) \| Respond to of 37746

Jacobs-controlled IPI now a big Clarent holder too Neal St. Anthony Star Tribune Published Sep 6 2001 IPI Inc., a small public company controlled by Irwin Jacobs and some close associates, acquired 5.1 percent of the stock of Clarent Corp. a few weeks before the California provider of Internet telephone systems said it may have to restate its financial results. Jacobs holds a large personal stake in Clarent, and the shares that IPI bought had been beneficially owned by Jacobs under a purchase-option agreement with a brokerage firm that has expired, according to a recent regulatory filing by IPI. Eden Prairie-based IPI is best known as the parent company of InstiPrint, the quick-printer franchisor, but also has been used by Jacobs as an investment vehicle. In an interview Wednesday, Jacobs said he and other IPI board members decided to purchase nearly 2 million shares in a private transaction with CS First Boston for about $6 per share. At that level, the shares traded near the value of Clarent's stated cash on hand, representing what appeared to be a good value, he said. Jacobs said that he has retained the 5 percent-plus stake in Clarent he directly owns and that IPI did not buy his shares. In hindsight, the purchase was poorly timed. Clarent shares fell to $5.37 per share this week and trading was halted by the Nasdaq Stock Market after the company announced that it had suspended several executives and that revenue for the first two quarters of the year may have been overstated. 'Clarent had a 48-minute conference call [with analysts and investors] on July 19 and they basically told everybody how great things were going,' Jacobs said. 'IPI has been making investments, and it was very conservative for IPI to pay $6 for $6 of cash alone [on Clarent's balance sheet]. 'No one anticipated their recent announcement. This is not an AremisSoft, no question in my mind. I don't think it's anywhere near the problem that is AremisSoft.' Jacobs, Carl Pohlad and close associates acquired more than 15 percent of the stock of AremisSoft, a Cyprus-rooted software company, at prices up to $18 per share. The shares now trade on the so-called pink sheets for under $1 as a result of allegations of fraud by senior executives that federal investigators are pursuing. Clarent has fallen from a price of $56 to $5.37 during the past year. IPI shares closed Wednesday at $4.70, off 1 percent. Jacobs and several longtime partners own or control about two-thirds of IPI stock. The company sold its stake in Conseco, another Jacobs favorite, at an average price of $14.54 per share this summer and realized proceeds of $20.7 million, or $4.26 per share. Conseco has traded around $8 per share lately. -- Neal St. Anthony is at nstanthony@startribune.com . © Copyright 2001 Star Tribune. All rights reserved.