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Biotech / Medical : Zonagen (zona) - good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (2516)	2/25/1998 1:20:00 PM
From: clochard	Respond to of 7041

Linda, the money doesn't come from anywhere because there is no money and no buyback either. I hope anyone dumb enough to go long on this stock doesn't have a lot of money tied up. I have seen a few scams in the last couple of years and this looks like one. And there are a lot of them, watch out!

To: Linda Kaplan who wrote (2516)	2/25/1998 1:39:00 PM
From: Dr. Voodoo	Read Replies (1) \| Respond to of 7041

Linda, this sounds oversimplified and I'm not sure if it answers your question. The money must come from "anticipated" excess cash. Keyword is "anticipated". If they need to issue more stock later, the buyback could turn out to be a really dumb thing depending on share prices they bought back and the price when/if they need to issue stock. In other words, by issuing stock Zonagen is asking for the public to invest money to fund their program until they no longer need to issue more stock. When they become profitable they will no longer need to issue stock to raise cash for operation. Zonagen anticipated by their offering that they would generate enough cash to run operations for a given period of time. By virtue of the SGP deal and the success of their offering they decided to use the extra cash to buyback stock. They think they have enough cash in excess that they will not get burned by the buyback. Clear as mud?