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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: William R. Polk who wrote (1259)	3/21/1998 3:48:00 AM
From: ncs	Read Replies (2) \| Respond to of 4467

Yeah, but if the notes are converted, you eliminate the debt from the balance sheet. BTW, the outstanding notes, at the end of 1996 was 90.800MM which would convert into 3,132,654 shares of SFE. That gets into the question of utilizing all non-investment assets and libilities into the NAV number. A quick glance at last year's annual report indicates that total assets, less investments exceeded total liabilities by 34.167MM, or about $1 for share. Of course this was offset by 30MM in goodwill. Thus at the present time we are pretty close just counting the outstanding investments in the NAV; however, if the debt were converted, the assets would then be equal to in excess of $100MM over the liabilities and therefore would need to be considered. When's 1997's Annual Report coming out? Neil

To: William R. Polk who wrote (1259)	3/25/1998 4:39:00 PM
From: still learning	Respond to of 4467

After much discussion, IMO we have never actually figired out how we should treat debt and cash. I tnink $91/29 share would net about 3.13 million new shares. e.g. (not real) If SFE had $300 mm in cash and converted the notes and then bought back the shares -- it would cost about $8 a shr (37-29) times 3.13 m shares, or $116 million to get rid of $91 million in debt. So, for about $25 mm above the exercise price they can get rid of their debt without diluting the stock. the dilution premium goes up over time as long as the stock price goes up.