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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (1157)	1/19/1999 1:39:00 AM
From: kolo55	Read Replies (1) \| Respond to of 1418

It appears Koo made several illegal moves. First, he dumped huge amounts of his stock on the market after an exceptional Q report, knowing full well that the results were pushed up by a one-time sale to TI. The company never revealed this risk of being dependent on one customer, until the next 10Q. Koo made millions on these insider trades based on the inside info he had. Secondly, he bought units at 17, comprising of one share and one warrant. He sold the shares back to the company at 16 7/8. The market price for the warrants was around 3 when he made the sales, and if he sold the warrants, he's collected close to 20 for the units. Considering he used margin, not bad for a few months work, and for an investment in a company whose business was declining (again he had access to inside info). But in order to bail out of his rapidly deteriorating investment he needed some patsies to buy the shares. And he got us, his shareholders to play the dupes, and buy the shares he wanted to dump. He used company proceeds from the secondary to bid the price up, and then in one fell swoop, dumped all his recently acquired shares to the company. Without this purchase at 16 7/8, the other shares purchased by the company has average around 11. We paid quite a premium to bail him out. Koo is quite good at buying and selling stuff, basically because he appears to be using illegal tactics. But he's been lousy at growing a business. Lau on the other hand, has been terrific at growing a business profitably. His business has developed technical and production capabilities that give him a competitive edge. And I'm betting in the long haul, this edge will payout in better growth. Finally, Nam Tai has a significantly bigger market cap, and would likely be the acquirer. You seem to imply that Deswell would be the acquirer, but looking at the balance sheets, I don't think this is very likely. If Nam Tai's management takes over Deswell at anywhere close to current market price, I will feel really screwed by Koo again. I'm sure he will generate value, which he will take himself, leaving his shareholders nothing for their investment again. Paul