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Technology Stocks : Research Frontiers (REFR) -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (924)	10/5/1998 8:46:00 AM
From: Joe Hoofnagle	Respond to of 50136

Roger: - "It is extremely unlikely that Ailorous will lose money on this deal." Why is it important that Ailorous lose money on the deal? Is it possible that Ailouros is desirous of owning a 20% interest in the company? I would read the deal carefully before going too short if I were you, and try to see if there is some way Refr can use these puts in conjunction with their buyback program to support the stock price. The "Put Notice" provision seems to give Refr contol of if, when and at what price Ailouris must purchase (notice the "if"). You guys might be stepping into a really bad squeeze. Don't let me talk you out of your position...a good short squeeze would be good for my long position. :^)

To: Roger A. Babb who wrote (924)	10/5/1998 10:13:00 PM
From: Joe Bilich	Respond to of 50136

I am inclined to agree--there is no way the fund loses on this. But I do think that there are potential win-win scenarios in addition to those where REFR and shareholders get screwed.

To: Roger A. Babb who wrote (924)	10/5/1998 11:06:00 PM
From: N. Dixon	Read Replies (1) \| Respond to of 50136

Roger, <<It is extremely unlikely that Ailorous will lose money on this deal.>> We agree. Ailorous is in this to make a lot of money, which they will when SPD products hit the markets. They do not need to bend rules to do so. That is why they agreed to the terms which are all in REFR's favor. REFR can set a $15 floor price each term if they believe this to be the true value and Ailouros can take it or leave it. Ailouros knew this going into the agreement and evidently have jumped at the chance to get REFR stock at $15. REFR does not need the funding as products will be out next year and revenues (which will grow as new companies come on board to use SPD in their products - be on the alert for these licensing agreements to start to come in) will fund the company's operations which are a minimal cost of less than 3Million (they have 8 million - marketable securities are treasuries) so they can wait to put stock to Ailouros. I think the point you have been missing that Joe alluded to (and I don't mean to put words in your mouth, Joe) is that Ailouros believes that REFR stock is going to worth quite of bit of money and that is another scenario that you seem to discount too easily. ND