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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: Little Engine who wrote (1265)	1/14/1998 2:09:00 PM
From: Omnichrome	Read Replies (1) \| Respond to of 27968

One can only speculate. Suppose a private company built itself from the ground up with a great deal of effort. Then it runs afoul of a Taxing authority. The Taxing authority may have the flimsiest of excuses, but they lean hard on the principals of the company - knowing that the target doesn't have the resources to battle for long. The principals decide they would rather retire or do something different and avoid current and future headaches. Ira or someone else at FAMH is courting another Cal company at the same time and happens to have discussions with one or more of the principals and a general meeting of the minds occurs. I have no idea what the company would go for (and neither does Ira as he has until tomorrow to analyze financials). I would guss this will be a leveraged buyout - meaning a cash down-payment and the rest paid out of future earnings. Wouldn't require a lot of cash up-front.

To: Little Engine who wrote (1265)	1/14/1998 6:22:00 PM
From: tony mendoza	Read Replies (1) \| Respond to of 27968

Little Engine: A company with 60 million in sales, if it is profitable, would normally go for 60 million dollars. If it is highly profitable, it would go for more. 3 or 4 times sales would not be unusual for the valuation of a highly profitable company. If we assume FAMH paid 1/2 of 60 million, for whatever reason, how do they finance this. One way:they could issue 90 million new shares. Assuming they didn't do this (they are not telling)I don't see how this company is going to borrow 30 million from a bank, so what options are left. If they got it with money laying around (a few million) and warrants, run for the hills. The fact that this stock has seen some heavy selling recently leads me to believe that you are all going to hear the word "warrants" sooner or later.