Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: William R. Polk who wrote (1262)	3/21/1998 11:12:00 PM
From: John Arnopp	Respond to of 4467

Bill, What's your source for the number of convertible shares? Fully diluted as of Dec. 31, 1997 was given as only 31.952 million shares. I'd be happy to redo the spreadsheet to reflect fully diluted shares, if we can nail down a number. Either that or we can wait for March 31, as I'm sure there will be other position changes as well. --John

To: William R. Polk who wrote (1262)	3/22/1998 12:37:00 AM
From: ncs	Respond to of 4467

William: My point was that if you consider the conversion of the convertible, then you have to also consider the decrease in liabilities the conversion would bring. As of Year end 1996, there was $90,800,000 in convertible debt which could be converted into 3,132,654 shares at $28.985. If they were converted, liabilities would be decreased by the same $90,800,000, or by $2.68 for each of the then 33.835MM shares outstanding. Adding this $2.68 to your figure of $35.63 brings the new NAV to $38.31, which remains a premium to Friday's close. In answer to the second part of your question, No I wouldn't be pouunding the table for this fact alone. I've been pounding the table because I think SFE, should be a $30-$60 stock without the NAV. As was discussed a couple of weeks ago, with three rights offerings per year SFE effectively pays a minimum equivilent of a $3.00 dividend. If you cam that at 5% you get %60; at 10%, $30. I'd argue for the higher valuation because of the performance of the "dividend" With that said, I think agree with John that we need to wait until the end of the quarter to make any adjustments. Hopefully by then we should have received the annual report and can further the discussion on what, if anything other than investments should be included in the NAV. ASIDE TO JOHN: See note No. 4 to the financial statements in the 1996 Annual Report. There is a convertible debenture which doesn't appear to be reflected in the diluted numbers. As far as I can tell, there remains an equivilent of the indebtedness convertible into 3,132,654 shares. I'm waiting for the 1997 annual report to verify that no more of the issue has been converted. Neil