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Non-Tech : Simula (SMU) -- Ignore unavailable to you. Want to Upgrade?

To: michael c. dodge who wrote (1155)	6/9/1998 4:23:00 PM
From: Noblesse Oblige	Respond to of 1671

Hi Michael.... There was heavy supply today in the high 16's, low 17's, though it was well absorbed until very late in the day. It should be noted that even with the conversions to common done for the 10% notes, that there are currently less than 10 million shares outstanding. The Chairman owns approximately one third of that number, and there is minimal institutional interest aside from Scudder. There are only two reasonable guesses to make about today's heavy supply...either there was shorting in the common as the original debenture holders are figuring on conversion, or Scudder lightened up an unwieldy position into the strength. Either way, it won't matter. The number of shares is finite, and anyone that doesn't realize that short of a full takeover today's announcement is the best news that we could have gotten from Simula doesn't have a clue what the company is about. In a matter of a couple of weeks, SMU will be "on the road," discussing this agreement with institutions. Now, with reasonable clarity about the "reality" of the side impact, head protection market, the company will be able to tell a very open ended story. Moreover, the fact that one of today's agreements is for a 2000 model year car (which gets into the marketplace in the latter part of 1999), indicates numbers and estimates will have to be reformulated for next year. My own guess is that we are looking at 1999 earnings at around a buck, good visibility into 2000, a probable spinoff of the Simula Auto Division, and more agreements to come for ITS. Why would anyone want to sell this stock at approximately 17 times 1999 earnings? Beats me.