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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Craig Stevenson who wrote (17973)	9/8/1998 4:29:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

Craig, it seems to me that the mere fact that the Reg D guys have increased their positions to 5% (the limit), would seem to imply that they believe in the long term prospects for Ancor. Otherwise, why would they convert? I'm not sure that they have increased their positions to the 5% limit. If I get a chance tonight, I'll try to dig through the filing to cite the section that refers to the 60 day issue. My take is that they may be at the limit as of 8/26/98, or they might be at the limit within 60 days (if they choose to convert between now and then). Ancor may have to report the higher of the two. I became suspicious when the common holdings were reported as either 692,604 shares or 678,751 shares of common stock for each of the Big 5. It seemed strange to me that they would hold odd lots, and even stranger that they would have the exact number of shares as someone else. Further, if any of them owned even 1 more share, they would exceed the limit. See Message 5684881 At this point I feel reasonably confident that I know that each of the Big 5 owns somewhere between 0 and 692,604 shares of common stock, but we may have to dig a bit more to find out exactly where. As to your second point - why would they convert if they did not believe in the long term prospects for Ancor - I don't know. They receive no dividends for their preferred stock, but they (Series C) do receive an 8% per annum "accretion." That is, for each day that they hold the preferred stock, they get a bonus of a few extra common shares. For example, if the conversion price on the 1 year anniversary is $1, they will get 10,800 shares of common stock rather than the 10,000 shares if there were no accretion. If they expect the conversion price to remain flat, you'd think they would hold. So why convert? The floor is open to speculation. They want to use the funds for other investments? They're trying to exert downward pressure on the bid price? They think the short term prospects are attractive? They like the long term prospects? Anyone else have any guesses? Greg