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Technology Stocks : NTN Communications, worth 185 million? -- Ignore unavailable to you. Want to Upgrade?

To: dwight vickers who wrote (1757)	12/8/1997 2:22:00 PM
From: Rich Genik	Read Replies (1) \| Respond to of 2985

Dwight, Info on S&S: I was lead to the two companies (IGCA and BPLX) from one of the Shorting threads on SI ("broken stocks" I think). The IGCA S-3's mentioned S&S while BPLX's filings (at least the 6 or so I read) didn't mention S&S by name, but indicated a single investor and Shepard was mentioned several times on the thread as being the investor for the pf.A issue. (i.e. no confirmation from SEC filings for the REG.S, which I guess we expect; however, I don't think that this name would be planted back in January just so I could look them up now.) 1. They could have acted as you indicate. This is a different plan than we were discussing before, where S&S would use the conversion to cover shorts. This is a riskier approach unless they can dump the whole lot at the conversion price. If they dump the shares, my guess is that they would lose money on that transaction as the price fell. They would make up more, of course, by buying in and covering their shorts, but they wouldn't make as much relative to just using the oncverted shares to cover. BTW, the scenerio you indicate requires less capital. 2. BPLX: I agree, anybody's guess. I think they did the REG.S because it was just one avenue for raising money. I tried to keep track of all of their securties sales, but it got too confusing (give me a good SU(5) field theory calculation instead :-). If you look at the most recent 10-Q, they must have done like 8 offerings in the past year, some conventional, some not, like the REG.S. It's more they were begging everywhere than they couldn't get conventional financing. I agree that the deals are structured so that S&S can't lose money. I don't see how this leads to sinister intentions. I would venture to say that S&S are more friendly to NTN that Symphony, LLP was, who almost broke the company. In Re: The bottom line. If you look at the last Q numbers, you notice that there was $1.4M in depreciation/amortization. Ignoring this to the bottom line, we would have made $300k in the quarter. This is what Jerry means by valuing the company on a cash flow basis, like a cable company. This is my understanding of the FCF number: you take the net cash provided by operating activities (-453k) and subtract net cash provided by investing activites (-1.5M) to get $1.1M positive FCF. In simple terms, if their equipment didn't depreciate, and they didn't make any capital expenditures, the bottom line would be a $1.1M profit for the quarter. yeah, thought you'd get a kick out of that INNN post <VVBG> gotta go... cheers, Rich