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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (17169)	12/8/2001 9:46:26 AM
From: elmatador	Respond to of 34857

Lex: KPN and why the real issues are not part of the discussion. Look that: "KPN and its bankers have pulled off a great escape by raising E5bn, almost doubling the number of shares in issue, without further wrecking the share price." Why they pulled this one out and the LEX Column editor is at loss? Well, it is simple. We know that KPN is launching DoCoMo European version of i-mode in three countries. This is not widely put into the open as the reason why KPN "almost doubling the number of shares in issue, without further wrecking the share prices." Lex: KPN Published: December 7 2001 20:32 \| Last Updated: December 7 2001 20:33 KPN and its bankers have pulled off a great escape by raising E5bn, almost doubling the number of shares in issue, without further wrecking the share price. For a company that three months ago was drifting towards bankruptcy this is no mean feat. But it is not quite the spectacular reversal of fortunes achieved by Sonera. And it involved playing fast and loose with existing shareholders' pre-emption rights. They were guaranteed new shares if they wanted them, but without knowing the price. Those who were unable or unwilling to double up on their past losses were diluted without being able to sell on their rights. This would be illegal in most jurisdictions, and rightly so. But Amsterdam is Amsterdam. And by making sure there was no market in rights, KPN's bankers made it difficult for hedge funds to short the stock. While KPN's highly leveraged shares were not exactly tranquil, the feared roller-coaster ride never happened, and the company got its cash. Great news - for KPN's creditors and bondholders. Their investment has been transformed at a stroke. Shareholders should not expect big short term gains. The gain from removing the threat of bankruptcy is already in the price. What has changed is that KPN now has a lot more options; the company need not be run solely for its creditors. The new management's focus on restructuring and cash generation is welcome. But KPN's strategy still looks half-baked, and will remain so until it finds a lasting solution for E-Plus. That is when shareholders can hope to see real upside