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 : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Dale Stempson who wrote (6114)	4/9/1998 7:51:00 PM
From: Michael Coley	Read Replies (2) \| Respond to of 7685

RE: Extra Dilution. I'm not sure how the market will take this tomorrow, but this press release just confirms my views for a number of reasons: 1) They just brought in $30 million on February 18. Now, less than two months later they bring in another $30 million. It seems like they're burning cash even faster than before. 2) This appears to have been a necessity, not a strategic move. Note that an ADDITIONAL 4.7 million shares were issued to induce the warrant holders to exercise. This is what they warned about in their 10-K. Notice that the warrants were for 12 million shares for $30 million. That's $2.50 per share. But that wasn't good enough for the warrant holders. SyQuest had to give them almost 17 million shares for the $30 million. That's $1.75 per share. That's what the venture capitalists thing the stock is worth. 3) They're still not selling in huge volumes. Notice that they still only show 17 million "cartridges" sold (in the history of the company). It's been there for a while now. 4) Like the SYQT bears have been saying, the high volumes lately have been caused by warrant holders dumping on the public. Those shares that they sold you in the last week or two only cost them $1.75. Not a bad return for the warrant holders! 5) Note that they have 81 million shares issued and outstanding as of 3/31/98. 6) Notice the deceptive way that they list the 81 million shares and 53 million warrants, not listing options and preferred shares. One might imply from the numbers shown that the total shares are 134 million, but it's really well over 160 million. This press release is so sugar coated that it might not hurt SYQT right away, but anyone with a calculator can see who the suckers are. This dog is going down. - Michael Coley - wwol.com

To: Dale Stempson who wrote (6114)	4/9/1998 8:13:00 PM
From: Dale Stempson	Read Replies (1) \| Respond to of 7685

Just thinkin' out loud here... let me get this straight... the investors first got those 12 million warrants for free... then they were able to convert them at a discount... and then they were given 4.7 million additional shares as an incentive to convert. Boy are we in the wrong business. It appears that these transactions resulted in increasing shares outstanding by 16.4 million, while bringing in $30 million in cash. Hmmm, that nets out to about $1.83 a share and a current $16 million, 50%+ return on their short-term investment (paid for courtesy of existing shareholders). I wonder how many SparQs need to be sold to make $16 million net profit... Let's see... More than 2 million perhaps? Now, only 53 million warrants to go. Hope it's worth it in the long-term folks. I'll stick with the trading and hope we get a little pop next week. Regards - Dale