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

To: David Pawlak who wrote (6872)	5/19/1998 1:23:00 PM
From: Afaq Sarwar	Read Replies (3) \| Respond to of 10479

David, The company could have proposed a normal IPO like most normal companies do. An appropriate percentage of the new company's stock could have been given to the Osicom's shareholders, and by selling the reaming to new investors the company could have generated cash for any ramp-up of GigaMux, etc. But, it looks like that they were advised to propose this Rights Offering. This seems to imply that these investment banking consultants concluded that with this huge dark cloud hanging over Par, it would be difficult to sell any part of this new company to new investors. However, they also concluded that the existing investors would be a rather easy target for selling the shares of the new company. The key difference between these two approaches is clear. In the first case the new money to support Osicom comes form new investors, while in the second case it comes from the existing shareholders. To get a sense what does every one feels about this scheme, all you have to do is watch the stock action. I can think of no other reason to resort to such a convoluted scheme. What is your opinion as to why they chose this approach. Regards, Afaq Sarwar