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

To: dwight martin who wrote (2445)	6/25/1998 12:34:00 PM
From: Amy Roberts	Read Replies (1) \| Respond to of 10081

Here is a different read on this from the Yahoo posters - Anybody understand and agree or disagree on this version of the deal?? I hope I'm not violating any rules by bringing this into the SI board and I don't know how to give the Yahoo poster credit for the remark.... <<<In the first transaction, General Magic agreed to sell these investors $30 million of Series C convertible preferred stock. The Series C stock can be converted into common stock at 135% of the market price of General Magic's common stock at the time of closing, or at a price based on the market price of the Company's stock prior to conversion, whichever is less.... The Company will also issue to the investors 150,000 three-year warrants and 160,000 five-year warrants to purchase additional shares of common stock at a premium to the common stock price as of the date of issue.>> For those of you who are trying to figure out whether or not the financing is a good deal, read the above carefully and notice the word "PREMIUM". The investors will be paying a PREMIUM to the market price of GMGC to the tune of 35% ABOVE market price assuming that GMGC executes their plan. The "or at a price based on the market price of the Company's stock prior to conversion, whichever is less" is the investors insurance that they will get a preferred price if GMGC does not execute according to plan, probably some revenue target or # of subscribers target. I would argue that this is a great deal from GMGC's standpoint in that they have an investor willing to convert their investment at 35% ABOVE the prevailing market price so if the deal was closed today the investors would be paying $19.58 per share (14.5 x 1.35). Comments?