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Technology Stocks : Hide & Seek - The Copy Protection Solution -- Ignore unavailable to you. Want to Upgrade?

To: Chloe R who wrote (542)	8/7/1998 5:03:00 PM
From: cardcounter	Read Replies (2) \| Respond to of 690

some bar room napkin calculations... I'm not at the bar yet (T-1 hr to happy hour), but here's some calcu-mutilations... with apologies in advance to those who are in the know... There are 3 public shells, each with 500.000 shares issued and up to 40,000,000 authorized ..... For simplicity, I'm ignoring the authorized preferred. If I'm not mistaken, HST's shareholders (I'm excluding management and the big shareholder's ownership portion) are buying $1 million dollars of the company (insert correct figure otherwise)... Now when the reverse merger goes through. HST's shareholders will receive stock from the shell co. They will now control 90% of the surviving company and the former shell stock holders will control 10% of the shell. So, if they keep their 500,000 shares (representing 10%), then HST's former shareholders will receive 4,500,000 stocks. Dividing 5 million stocks by 1 million, the share price is .20 (book value). If, the authorized 40,000,000 shares are issued, then the stock will be worth .025 each. I'm probably missing something in my calculations in that I've excluded the full value of the company and management's/big shareholder's ownership portion... but I was just trying to come up with the book value price range of the stock.. In any event, HST pre-public shareholders will suffer dilution.. (your 100% ownership goes to 90%) as part of the cost of going public via the reverse merger.. but this should be of no surprise to you as HST's financials fully disclosed this dilution risk... sometimes the early bird gets wormed... I'm just messin with ya, have a good weekend everyone... hopefully, I won't get wormed at the casinos this weekend