Neil , good question. I don't understand the secrecy either.
Hayes Corporation recently had a $45 million 6% Convertible Pfd. financing deal very similar to Ramtron's. However, Hayes listed the names all of the "Investors" in their first 8-K filed with the SEC. I only point out Hayes because it is an excellent example of how current shareholders get taken for a ride in these creative financing deals. The Hayes Convertible Pfd had a 6% dividend and 85% discounted conversion, but no conversion and distribution restrictions other than those required under the various Securities Regulations. To make a long story "short" Hayes stock has plummeted(just look at a chart) since its shareholders approved that financing deal and it has now culminated into a "Standstill Agreement with each of its 6% Convertible Preferred Shareholders. Under the terms of the Agreement, Preferred Shareholders will not engage in any sales or ''short selling'' of the Company's stock and will not convert any Preferred shares, except to cover pre-existing short positions, until March 15, 1998." biz.yahoo.com
Of course this is a worst case scenario. However, despite Ramtron's new "Investors" stating they are "...purchasing the shares for its own account for investment and not with the view to distribution..." coupled with the fact that there are some "loose" conversion restrictions governing the conversion and sale of the common I believe there's room for the new "Investors" to make life miserable for awhile if they choose to start "hedging."
It looks like the "Investors" MO is to establish large short positions, which would put downward pressure on the common and then convert the Pfd at a lower price. The "Investors" then close their short positions by delivering the newly converted common against the shorts in order to take full advantage of the leverage created by the Convertible Pfd. I'm sure there are other "hedge" plays, but I think this scenario is the most common and maybe we should an eye out for an increase in the number of shares sold short and a depressed stock price which may indicate "hedging" in the future.
Here's the skinny from the 8-K :
"Section 7.12 Publicity. The Company agrees that it will not disclose, and will not include in any public announcement, the name of the Investor without its consent, unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement."
I'd imagine we'll eventually find out who the "Investors" are in a future SEC filing. However, if you want to looking at the "Investors" involved in the first financing deal may give you an idea of who might be involved in the second.
Also from the 8-K :
"3. Registration rights held by: (i) DFA Group Trust - Small Company
Subtrust, U.S. 9-10 Small Company Portfolio, and DFA Group Trust - 6-10 Subtrust in connection with the issuance and sale of 800,000 (subject to adjustment) shares of Ramtron Common Stock to those purchasers on December 23, 1997, and (ii) Linda S. Cappello, Gerard K. Cappello, Lawrence K. Fleischman, Jonathan Davidson, James W. Montgomery Living Trust and Kim Enterprises, L.P. in connection with the issuance and sale to those purchasers of Common Stock Purchase Warrants covering 80,000 (subject to adjustment) shares of Ramtron Common Stock in connection with the December 23, 1997, sale of Common Stock described in (i) above."
DFA stands for Dimensional Fund Advisors Inc.,
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
yeske.com
forbes.com
nypost.newscorp.com
I like what I found out about DFA. The symbol for the two funds are DFSTX and DFSCX.
Linda S. Cappello
Gerard K. Capello
Cappello Capital Corp.
1299 Ocean Avenue, Suite 306, Santa Monica, California 90401.
Also:
Cappello Laffer Capital Corp. (Linda, Gerard, and Aurthur B. Laffer of the "Laffer" curve fame)
Cappello & Laffer Group Inc. (Alexander Cappello and Laffer)
Do a "Full-Text" search here at SI using "Cappello", I didn't like what I found, but judge for yourself.
Lawrence K. Fleischman, President, Capital Vision Group, Inc.,
Not much info on CVG. I think it's out of New York.
Jonathan Davidson and James W. Montgomery Living Trust
Mr. James W. Montgomery is Managing Director of CEA Montgomery Media L.L.C.(CEA-M)
Jonathan Davidson is a Senior Vice President of CEAúM
Santa Monica, CA 90401
monty.com
CEA is Communications Equity Associates, Inc.
"We are particularly enthusiastic about our joint venture, CEA Montgomery Media, based in Santa Monica, California, which specializes in information technology, multimedia, new media, satellite communications, enabling technologies, and certain content-related ventures. CEA Montgomery Media is working in association with Capello & Associates to provide a very attractive financing vehicle for public companies."
Tampa, Florida
commequ.com
CEA currently co-manages three international private equity funds with Baring Venture Partners, a subsidiary of the International Nederlanden Group, N.V., Holland's largest financial institution:
Baring Communications Equity Limited
Baring Communications Equity Asia-Pacific Limited
Australasian Media and Communications Fund International
CEA seems to be a pretty respectable firm.
Kim Enterprises, L.P
Nothing on this outfit.
There some other points to make about this financing deal, but I've got to do some more reading.
Good luck
Mark |
