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Technology Stocks : Vantive Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Trader Dave who wrote (1486)	1/23/1998 11:44:00 AM
From: Clam Clam	Read Replies (2) \| Respond to of 3033

Re. reported EPS. Hold on, Dave. They did $.19, fully-diluted, and fully taxed. If you are going to use the share count that assumes they convert all the debt to stock, you get a share count of 28,642. You can't use the same interest number as if they converted the stock, they wouldn't have to pay interest. Your $.167 number double penalizes VNTV for the convert they did. Before the convert, VNTV did $390k in interest income and they had cash of about $33mm at the end of March and June. This implies they earned about 4.7% interest on the cash (you have to annualize the $390k). If you use the diluted share count, you have to assume they earn interest on the cash. Assuming the same 4.7% interest rate on the new cash balance, gets you almost $1.2mm in interest income which if you run it through the income statement gets you to $.1899 (using 37% taxes). Even if you only assume a 3.9% return on cash, you get $.185 which rounds up to $.19. Therefore, they did $.19 clean. I understand and agree with your point re. fund managers. In general, they are a group that doesn't know what they own. This is another great argument for diversification. Anything can happen in a quarter so your performance can lag badly over the short-run despite making good bets if you don't weight your bets correctly. More later.

To: Trader Dave who wrote (1486)	1/23/1998 4:46:00 PM
From: emmet	Read Replies (1) \| Respond to of 3033

YOU NEED TO TAKE A CLOSER LOOK AT CALCULATING THE DILUTED EPS UNDER FAS 128 BEFORE THROWING OUT STATEMENTS THAT SEEM LIKE THE COMPANY'S EARNINGS RELEASE ARE WRONG; IF YOU HAD READ THE FOOTNOTE IN PRESS RELEASE YOU WOULD KNOW THAT THE NET INCOME UNDER DILUTED IS ADJUSTED TO ADD BACK THE INTEREST EXPENSE FOR THE QUARTER NET OF TAX ASSOCIATED WITH THE CONVERTIBLE DEBT; SO YOU ADD BACK INTEREST TO NUMERATOR AND ADD BACK OPTIONS AND THE CONVERTIBLE DEBT SHARES TO THE DENOMINATOR; DO THE MATH-IT'S NOT THAT HARD;