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 Technology Stocks | Breakaway Solutions Inc-(BWAY)

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To: .Trev who wrote (118)1/22/2001 4:20:47 PM
From: John Finley   of 178
 
From Walter Buckley CEO of ICGE on 1/12/01:

``This additional backing shows our ongoing belief in Breakaway Solutions and its FSP business model.''

Yep, $5M at 12% fully secured by substantially all of BWAY's assets AND warrants for 9,737,447 shares at 11/16. What a deal! Since I believe in the "FSP" model too maybe Brooks will cut me a similar deal? Oh, that's right, all of BWAY's assets are spoken for.

9.7M shares is dang close to the float. Sheesh! And they called attention to this with a PR??

JF

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To: John Finley who wrote (119)1/22/2001 6:01:41 PM
From: kinkblot   of 178
 
$5m is hardly worth mentioning.

That's one year's rent on the new headquarters.

In comparison, USIX got equity financing of $130m, plus a $50m line of credit, plus a commitment to additional equity financing of up to $140m if needed.

WT

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To: John Finley who wrote (119)1/22/2001 7:05:24 PM
From: kinkblot   of 178
 
The warrants seem excessive for a 2-month bridge loan.

Wouldn't any potential backer (besides ICGE again) look askance at that?

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To: John Finley who wrote (119)1/22/2001 7:23:32 PM
From: .Trev   of 178
 
Now we know why the suck back. All pain will pass eventually. Makes me feel better about that little $0.67 transaction , Do you think they'll retro apply some warrants to my deal, or am I expecting too much?????

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To: kinkblot who wrote (121)1/22/2001 7:26:18 PM
From: John Finley   of 178
 
I can't believe this is the entire deal it sounds so ridiculous.

You don't suppose that ICGE has exercised the warrants already for the grand "funding" announcement? About 17M shares have traded hands in the six trading days before today. Nah, probably not.... I assume that would be illegal.

JF

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To: .Trev who wrote (122)1/22/2001 7:36:06 PM
From: John Finley   of 178
 
Now we know why the suck back

Yes, I'm surprised it didn't retreat further. I lightened up after reading the 8-K. There wasn't a mass exodus so there must be more to the story.

JF

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To: John Finley who wrote (123)1/22/2001 8:32:15 PM
From: kinkblot   of 178
 
In the initial press release, Breakaway stated:

the Company has obtained secured financing from Internet Capital Group

Most readers would assume that this refers to an amount of some significance in relation to the company's ongoing needs. However, as you said, this does not appear to be the entire deal and is more like a bridge loan. If they gave up an arm and a leg (potential 20% dilution) for a bridge loan, one shudders to think what real financing will cost.

WT

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To: kinkblot who wrote (125)1/23/2001 2:45:00 AM
From: .Trev   of 178
 
yOU MAY RECALL THAT IN ONE OF MY EARLY POSTS HERE i COMMENTED THAT THE ABSENCE OF DETAIL in the announcement may well be significant in determining the future popularity of the deal. Sometimes what they don't say is more important than what they do say.

Only time will clarify the"whole deal", but it's conspicuous that ICGE themselves are not in a flush situation as far as cash is concerned and they may very well have to go through the funding ,mill before subscribing the warrants.

The new motto for the Nas may yet turn out to be...."Life is tough, and then you die"

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To: .Trev who wrote (126)1/23/2001 8:05:17 AM
From: John Finley   of 178
 
You're right, Trev. We now know why there was an absence of detail. I should go through BWAY's previous filings and see what kind of credit facilities they had. It's hard to believe that they had to go with such expensive money.

This sort of looks like ICGE is trying to own BWAY in a sort of backstreet kind of way (bypassing the shareholders).
JF

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To: .Trev who wrote (126)1/23/2001 9:09:43 AM
From: kinkblot   of 178
 
Yes, I recall you raising that red flag.

It's not like it took more than a few sentences to include the details, so I don't particularly like the way they handled it.

I decided to step back out for now. It was my smallest position, but despite that, a big distraction.

Will

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