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

To: Jonathan Babb who wrote (1131)	10/14/1998 9:40:00 PM
From: Zeev Hed	Respond to of 50172

Jonathan, it is not unusual for a company to loan its officers some funds. As long as these transaction are "arm length" and the stock received in exchange for the loan are priced at market, I have no problem with that. I do not see a major pattern of abuse. I do not think that the company should use cash required for operation and survival for buying back shares, even if they buy the shares at prices that are lower then what they issued these at. I can see a company buying its own shares when they have excess cash on hand and the buy back are a form of tax free dividend, but REFR still has an unknown number of quarters and possibly years of negative cash flow on their hand and cash should be used for assuring survival through such periods. It is not up to them when their licensees will be in production, and I have seen too many projects in my life being nixed by changing market conditions (a recession for instance), by new competitive approaches or by the "displacement" of the champion for the new product in the company. The purpose of my last post was to point out that in this case, s death spiral is less likely (because of the cash on hand) then in most other floorless situations, but if they buy back to many shares, they'll set themselves up for cash shortage just as a bear market maul the stock. Zeev Zeev