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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: soup who wrote (21402)	12/24/1998 2:39:00 AM
From: Eric Yang	Respond to of 213173

"Would someone please translate the above section into English? I think it means that AAPL could buy out MSFT's shares for $4.5 million special "dividend" at its discretion." Soup I don't think that's what it is saying. It doesn't mention any special clause for the repurchase of those preferred shares. The section you posted was identical to what was in previous filings with the SEC and it basically outlines the following. • Microsoft invested $150 million in Apple • The purchase is in the form of "Apple Series 'A' preferred stock" •These are essentially 'token shares' created specifically for this transaction and should not be confused with regular shares since they are quite different. •Each of these preferred shares are valued at $1000 at the time of the purchase. A total of 150,000 shares were purchased by MSFT. 150,000 x $1000 = 150 mil • These shares are convertible after 3 years at the conversion price of $16.50. Thus each of these preferred share is equivalent to about 60.6 regular shares because $1000/16.5 = 60.6 • If and when Apple announces dividend, preferred share holder MSFT will be paid first at $30 per preferred share. That comes out to be the equivalent 50 cents per year for our regular shares $30/60.6 = 50 cents. Which is equal to 12.5 cents per quarter. In other words, if Apple announces dividend, MSFT would get it first and at minimum it would be paid the equivalent of 12.5 cents per share per quarter. However if dividend announced is greater than 12.5 cents per share, MSFT would receive the same higher dividend as everyone else. •These preferred shares are non-voting and cannot be sold until first possible conversion date which is Aug 5, year 2000 ( Aug 5, 1900 to Wintel machines) Did I made it more confusing? ;-) Eric