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Technology Stocks : SCNI -- Another internet play? -- Ignore unavailable to you. Want to Upgrade?

To: Leman who wrote (3)	6/2/1999 9:04:00 PM
From: The Rainmaker	Read Replies (1) \| Respond to of 6

SCNI...The Future Prospects.. I saw the following on another thread and thought that it would be of interest here..i cant take credit for writing it..just coping and pasting... Comments??? A few days ago, Specialty Care Networks filed a proxy statement explaining all the exciting plans they have for the company. Though the proxy is very long, I spent the day reading the whole thing and found it very interesting. I have provided a link to the proxy below for those of you who have a few hours to kill. For those of you who want to get right to the point, I have provided references you can search for to tear through it quickly. Plan: SCNI is currently a PPM provider. A business that has been fraught with failure the past couple of years, and their stock completely reflects it. It has steadily declined from $10 to as low as $0.50 over the past year or two (it currently trades at $1.25). Now the Company has decided to sell off the majority of their PPM business and move almost exclusively into the healthcare internet space. If the plan meets the approval of 50% or more of the shareholders in a vote on June 11, then the plan will go into action. After approval: The Company already has agreed to sell back 10 of their PPM contracts. It return, SCNI will receive $17.2 million in CASH as well as 3.8 million shares of their stock back. This will result in the number of shares outstanding being reduce from 18.6 million to 14.8 million. The cash will go from $3.8 million to $21.0 million. That means they will have a $1.42 per share in cash. Not too bad, considering they trade currently at $1.25. (Search for $17,172 to find this in the proxy) They plan to also sell a 19.9% portion of their Internet business. An event that will come sometime around the June 11 date. Most likely after, but not too far after. This extra funding will help to further fund the building of a new website, greatly increasing their Internet offerings as well as greatly increasing their shareholder exposure and understanding of the new business. (Search for 19.9% to find this in the proxy) Outside Valaution Confirmation: As part of the restructuring, SCNI hired SunTrust Equitable Securities to do a valuation on the Company. They came up with a valuation of $1.56-$4.20 for the existing business, of course with the broader Internet business, this valuation could be substantially more. But at this point, it establishes a base valuation, a lot hire than the current $1.25 even without playing the Internet card. (Search for $4.20 to find this in the proxy) Risks: The vote may not go through on June 11. Although this is a slim possibility, there is a chance nonetheless. The board is all in favor of the restructuring, now it is up to the shareholders. With the way things have been going with Internet companies, I couldn't see why people would not be in favor of this restructuring. Well, here is the link to the proxy statement. I encourage all to do their own due diligence on this one before investing. sec.gov