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

To: Dale Stempson who wrote (6130)	4/10/1998 3:14:00 AM
From: James Choi	Read Replies (2) \| Respond to of 7685

The possibility of these warrants being exercised has been there all along. It is clearly warned in their SEC document. Now, wouldn't the market have figured that fact into the price of the stock? Or will it take this news as something unexpected? It seems to me that the market must have reacted when the warrants were issued, not when it is exercised. Any corrections are welcome. James Choi

To: Dale Stempson who wrote (6130)	4/10/1998 4:03:00 AM
From: PerryA	Read Replies (1) \| Respond to of 7685

Hi Dale . . . I occasionally still lurk on this thread and mainly wanted to express my appreciation for your continuing informative posts. I was one of the bulls, along with Joe Reich and BPP, about a year ago and jumped ship during the big rally last fall. Your posts were always informative and helped me maintain a more realistic perspective on SyQuest's potential. (As an aside, thanks to Michael Coley also.) I am still curious, however, about your continued interest in SyQuest. I was expecting revenue well over 75M per quarter by now. I now find it hard to believe they can turn this sinking ship around (even though I consider their products excellent values). I realize you're are just trading, but still I am curious about your devotion to SyQuest when there are many other good trading stocks around. Is your job (quality assurance) related to the disk drive sector? Just curious. Thanks again for keeping the SyQuest investors (potential and actual) aware of the downside. Regards - PerryA

To: Dale Stempson who wrote (6130)	4/10/1998 10:06:00 AM
From: hankiba	Respond to of 7685

SyQuest Stronger in Financings!!! If you have read previous 8-k, S/3 of the company, you can see that the same parties have invested with SyQuest in the past. Take for instance Series 7 vs Series 5. For those that do not know, Series 5 preferred stock and warrants were issued last summer/fall when syquest was getting crushed by Iomega. as a result, the company had to give up a lot for financing. In finance terms, they gave up .7 warrant for every $1 spent by the investors. This equalled 21 million warrants for $30 million in financing. However, in series 7, the company had more investors (assumption) to get financing from because there product was selling better and there was less bankruptcy risk than in the past. The warrant structure was much less dilutive, only giving up approximately .5 warrant for each common preferred share issued. This equalled 5 million warrants for $30 million in financing. Comparing the two deals, Syqt seems to have been much stronger the second time around. The recent press statement seems to be an explanation of the company trying to clean up the overhang by having the private placement investors exercise their warrants and have the shares in the float. The company had to give an inducement to these investors to exercise because of the time value left on the warrants. Therefore, the 4.7 million of restricted stock. 4.7 million shares at average price of 2.8=13.16 million incentive to give up 12 million warrants. The company got $30 million less 13.16, or 16.84 million worth of cash and cleaned 18% of the warrant overhang. It would seem to me that if the company was in dire straits, the invesors wouldn't have taken resticted stock, they would have requested a lowering of the warrant exercise price or replacement warrants. However, the company only gave them restricted stock. I think once investors digest what really happened, they will be impressed with Syqt's deal. Hank