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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: Grantcw who wrote (6116)	3/21/1998 5:09:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 10479

<< Thank you for the kind words. I wish we could see things the same way on this stock... You still have time, ya know. >> You don't seriously think I would change my mind about this company, especially with the civil suit filed against me. << Unlucky for me that I'm an accounting major taking the CPA this semester. When the 10-K comes out, I'll try to give an unbiased view of what I see going on if I have the time. >> Ok, but remember, there was a CPA on the GIFS thread who tried to rationalize GIFS accounting for me. He forgot to take one thing into account though. GIFS falsified their SEC filings with made up numbers so accountants couldn't have known. Only common sense would have saved you in that situation and unfortunately the guy with all his fancy degrees lacked that. (I'm not saying you lack common sense by the way). Same story with Bre-X and others. Bre-X had a huge market cap and had a lot of institutional investors backing them. They were simply lying to the public. Just last year Centennial Technolnogies was mentioned as the top performing stock on the NYSE for 1996, up 400 or 500% (I can't recall the exact figure). Later on the CEO was indicted and it became known that he was falsifying sales, making it look like they were selling stuff like crazy. Didn't the Barron's article make reference to this sort of thing? I seem to recall reading about some alleged falsified sales being talked about regarding some company in the Barron's article on Osicom. CTN (now CENL) had real products (just like Osicom) but it was still a scam. I think the company (with new management and class action suits behind it) actually reported a small profit last quarter. They are still booted off the NYSE and now they are traded on the "pink sheets". You just can't believe everything you read, when there are millions of dollars at stake companies will go to great lengths to con people. << As for the private placements, I admit that they have a history of doing them and that they will need money sometime soon to finance growth >> You might be interested in this article from Bloomberg. Tells how floorless convertibles can destroy a company. Stocks: A Catalyst of Collapse? "Death-spiral convertibles" leave companies twisting. bloomberg.com (an excerpt) By going after easy money, the toxic-convertible holders essentially send the company into a death spiral that disrupts management's ability to operate and embroils it in a fight with its financing partners. You don't want to be an ordinary shareholder in a company slipping into that black hole. Remember, Osicom chose to engage in all the convertibles placements. Nobody forced them. The article is correct in pointing out that they can sometimes be useful. But when they are used over and over again they spell disaster for a company. << Should I sell now in fear of a private placement? No way. Here's how a floorless works. The company negotitates the thing and then puts out an S-3 filing declaring their intentions >> Not exactly. Companies do not have to declare their intentions ahead of time. A company can engage in a private placement without notifying you in advance. Osicom even addressed this in their last 10Q SEC filing. I suggest you go read it again. The reason they do it this way is because if they were required to announce it ahead of time, everyone would know that dilution was on the way and everybody would sell/short. That would drive the price down and make the financing deal all that more unattractive. With a lower stock price the company doing the convertible would have to issue more shares to get the same amount of money. It would be a self defeating prophecy. << That means that I have some time from when the S-3 is filed until the shorting commences to get out with my money. >> I think I just explained to you why this is not the case. << This actually bothered me a little too. The board members come from highly respected organizations (Bear Stears and Houlihan, Lokey, etc.) and I don't understand why they couldn't find 1 other person in this grand world to run the company. >> I'm not all that familiar with the board but I believe the vote by the board to keep Par was long before the guy that came from Bear Sterns arrived. I'm not familiar with Houlihan or Lokey. << I understand your point about Par's track record. Could he possibly have learned from his mistakes? >> Nope, I don't think so. I don't call them "mistakes". Mistakes sounds like honest goof-ups from a lack of experience. I think that everything going on with this company is quite intentional and pre-meditated. It sounds like some people associated with FIBR have had plenty of practice with prior companies to engage in these sorts of tactics all over again with Osicom. << It's pretty hard to start successful companies in this nation >> Agreed. But that has nothing to do with Osicom. << Are all CEO's that run 1 company into the ground destined to run all companies they manage into the ground? >> So you admit that FIBR's CEO has run this company into the ground? Why not let him see if he can revive it BEFORE laying your money on the line. Why bet on a horse that has come in last for so long? << P.P.S. I'm pretty sure your old flame LTPHA just issued a floorless. Too small of a company for me to short, but the convertible shares are a rediculous amount of the float. >> I don't know if it was a floorless or not. Doesn't matter either way, I didn't even bother to read the release or filings. I have not owned LPTHA stock for a while now and don't have any current plans to purchase it again in the near fututre.