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To: Andrew H who wrote (2747)2/5/1998 3:17:00 PM
From: John R. Green  Read Replies (1) | Respond to of 27968
 
If EPS is base for stock price A lot of the stocks should pay us to
take shares. my own opinion.



To: Andrew H who wrote (2747)2/5/1998 3:44:00 PM
From: John Fairbanks  Read Replies (1) | Respond to of 27968
 
People keep mumbling about the dilution from the line of credit if
Ira decides to use it but I think we're missing something here...
HELLO! It's not like we're planning to borrow this to pay for day to
day expenses! Anything we borrow against it will be used to aquire
a company and add to the earnings of the corporation... which should
hopefully counteract dilution.

It's just like personal debt. If you go out and buy a bunch of clothes
and such on a credit card, that is called destructive debt. If you
borrow against your credit cards to start a business which allows
you to pay back the cards and have a business to boot (a friend did
this very successfully) that is called constructive debt.

Dilution, as long as it is constructive, can be a very good thing
since it improves the liquidity of the stock and the attractiveness
the institutions... as long as the earnings are increasing with share
count.



To: Andrew H who wrote (2747)2/5/1998 3:46:00 PM
From: Brad  Read Replies (5) | Respond to of 27968
 
Andrew, Common now... please. I believe you are a better person than that. You are letting stuff get to you.

Many of us have had things said about us that are less than favorable. It is unfortunate. ALL of us (myself included) can stand to be better people if we choose to be.

----->>>> Now, on to my point. You said...
¯Brad suggests that since the shares will be restricted, it should not effect the price. However, that is just not so, since the additional shares will be calculated into the eps figure which, after all, is the primary basis for the stock price.®

PLEASE READ (and quote) my complete point rather than selective excerpts.

I ALSO said it is possible that they might NOT have to issue ANY shares at all as collateral. It could simply be done with warrants that might NEVER actually need to be exercised.

One more point. EPS is not the "primary basis" for stock price. Supply vs. demand drives the price. EPS certainly plays a part, but if EPS was all there was to it, any company that was not making a profit would not even be trading.

I think we will see a noticeable increase in demand sooner than many people think. Just my opinions, as always.

Best wishes,
Brad

PS. No big deal, but just for the record Andrew, (ref post #2747) Ira Monas is the President. Arif Adam is the CEO.



To: Andrew H who wrote (2747)2/5/1998 4:09:00 PM
From: CO  Read Replies (1) | Respond to of 27968
 
Andrew, I think the company would be more inclined to use warrants in the first place. Warrants would not effect the eps calculation.

IF they did use restricted shares, they would not be free trading shares and would not be added to the float. The stock price would not be effected nearly as much. The company would then have a year to use the money to acquire and add additional value to the company and then buy back the shares. The end result could be VERY positive.

There are other factors that drive the price of a stock beside just the eps calculation. The law of supply and demand is a very stong force that drives the price of a stock.

Cheryl