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

To: Grantcw who wrote (6903)	5/20/1998 2:29:00 PM
From: David Pawlak	Read Replies (1) \| Respond to of 10479

Grant- Based solely on other rights offering deals I've been checking out, Osicom will likely receive the cash from the rights exercise and the new company will receive the cash from the IPO proceeds. Osicom will likely still retain a certain % of the new publicly traded company. So for instance, Osicom may hypothetically hold 40% of the new company, spin 40% off to shareholders in the form of a non-taxable event rights dividend, and IPO the remaining 20%. If this occurs, Osicom would benefit from the NET+ARM's success by having the marketable securities of its NET+ARM shares on its balance sheet as well as a cash infusion from the rights exercise. The new company will benefit from a cash infusion as a result of the IPO proceeds which should really help them beef up their marketing staff, allowing them to realize the full potential of this NET+ARM technology. Although Osicom won't hold 100% of the NET+ARM division, they will likely retain a substantial share of it and allow them to still share in its success. My opinion is that it is likely to be more successful on its own, as the new division will have its own resources instead of having to compete with Osicom's other divisions for funds. Again, this is all speculation at this point, but from my analysis of recent rights offering deals, this is typically how it works. The actual resulting terms may differ substantially.