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

To: KJ. Moy who wrote (19391)	11/15/1998 12:45:00 AM
From: Heddon	Read Replies (3) \| Respond to of 29386

If Roy Sardina thinks that the opportunity cost of developing an fc switch is $35 million plus or minus what makes any of us think that this company can achieve a share price of $5 or a market cap of $125 million. Maybe on hype but that's about it. Would this new options repricing have something to do with trying to keep the "brainpower" on board if the company is sold? The company isn't worth a plugged nickel if the engineers jump ship. Everything I've seen in the past 30 days points to this company being sold on Ken H.'s terms.

To: KJ. Moy who wrote (19391)	11/15/1998 1:23:00 AM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

From the 10-Q: As of 9/30/98 there were 70 Series B and 680 Series C preferred shares, and 19,194,374 common shares outstanding. By 10/30/98 there were 19,700,604 common shares outstanding. This increase of 506,230 common shares in the month of October could be attributed to the conversion of approximately 50 preferred shares during that time, which would leave 700 preferred shares remaining as of 10/30/98. This is in agreement with the information given in conference call of 10/28/98 that $7M remained. On 8/26/98 1279 preferred shares were outstanding. One month later only 750 preferred shares remained. By 10/30/98 this number dropped to 700 shares. If we assume that as many as 100 preferred shares have been converted since 10/30/98, the common shares should have increased by a corresponding 900-1000K. The remaining 600 preferred shares will convert at significantly lower dilution. If all 600 shares were converted this month it would add another 4M common shares, for a worse case of total common shares outstanding at the end of this month of 24.7M. Since it is unlikely that all preferred shares will be converted by the end of November, the dilution will be less than that speculated above. The least that I can imagine it being is 23M shares outstanding when conversion is complete, while the most is 24.7M in my opinion. Said another way, our slice of the company will be reduced by 15-20% through dilution. Unless I am overlooking something, this doesn't strike me as very ominous. If the smart money sees it the same way, the current price reflects the 20% discount. Isn't ANCR worth more than $62M? Greg