Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: savolainen who wrote (11463)	12/11/1998 8:36:00 PM
From: Dennis R. Duke	Respond to of 42804

30 year T-bill mature at dates in the future and are traded everyday. The same goes for corporate debt. The value of the debt security will be related to its interest rate relative to other interest rates being offered in the market place and any other rights that might yield return to the debt holder. In MRVC's case the interest rate is 5%, as I recall. So the upside is not in the interest rate. It is in the conversion feature at the approximately $24 per share rate. Given the current market price of MRVC the conversion feature is not worth much currently. So a price at less then the face value would be paid for these debt instrutments. If you have got to have the cash now, the 53 was fair value for that transaction. My belief is that the remaining holders of the $90 million of debt believe, (Due to their position of importance to the company and the amount of capital that they have invested, I trust that they are better informed then us.), that the $24 conversion price or better will be seen before said debt is called by the Company paying off the balance due in 2003. That appreciation in stock price or its potential is why the debt holders invested in the first place. Let's hope the Company has told them secrets that will make us all very comfort sometime in the future. I am not expecting any fast turn on this one. Earliest up tick, IMHO, is January earnings anticipation and announcement after a difficult tax selling December, which I hope to use as an accumulation opportunity. I am by no means a corporate debt expert. But I R an Accountant. Later, Dennis