HighwayMaster still needs to restructure some time soon. Anyone who looks at the numbers can see this, and Mike Smith has been open about it. The balance sheet is highly leveraged and the interest payments on the debt are $1M per month.
The sooner the restructure the better, because the closer to cash run out, the worse the terms.
Stock price is very important, because if the stock keeps running (especially above SBC's $14 conversion point), HighwayMaster might be able to private place common stock, convertible preferred stock, or convertible debt and use it to reduce the high-yield debt load.
Without a strong stock price, HighwayMaster will have a hard time raising any new money at reasonable terms due to the debt load risk.
So, keep it going up, and there will be a double benefit: the fundamentals will get better after restructuring, helping the stock keep going further despite the dilution.
When the debt load is no longer a threat, only strength will be left.
In the recent past some one talked about DART testing HWYM ----I guess it didn't go to well cause QCOM got the contract.
NOT GOOD AT ALL: see belowQUALCOMM's OmniTRACS Mobile Information Management System Selected by Dart Transit Company - Dart Transit to Purchase 1,000 OmniTRACS Units - SAN DIEGO, Feb. 16 /PRNewswire/ -- QUALCOMM Incorporated (Nasdaq: QCOM - news), leader in providing wireless data solutions, today announced that St. Paul, Minn.-based Dart Transit Company has selected QUALCOMM's OmniTRACS� satellite-based mobile information management system for its fleet. Under the terms of the agreement, Dart Transit will purchase 1,000 OmniTRACS units.
``Our company relies heavily on mobile communications,'' stated David Oren, executive vice president for Dart Transit Company. ``After testing and using satellite and land-based communications systems, we chose QUALCOMM's OmniTRACS because of its long record of industry stability and product reliability. QUALCOMM's success in the mobile communications industry has proven that it is the premier solution in fleet management.''
``As competition in this industry increases, companies such as Dart Transit must have the ability to provide quality, flexible service to its customers,'' stated George Dunn, vice president of domestic sales for QUALCOMM Wireless Business Solutions. ``In turn, mobile communications providers must have the ability to meet heavy demands and provide reliable products and services. With 12 years' experience in offering fleet management solutions to the transportation industry, we welcome Dart Transit to our list of customers and look forward to providing them with the quality of service they demand.''
Convertible Debt or preferred in any upcoming financing. Have been in high potential stocks which used convertible debt to reduce current interest rate and in effect issue new stock at a higher conversion price later on (Real Smart, Huh???) So what really happens -- the buyers (often private placement of the convertible debt or preferred) do a fancy short hedge where they lock in the interest rate and by hedging reduce their exposure to price changes dramatically. This results in a safe haven for "SNIPER" covered shorts and really creates a lousy downside pressure on the stock. Then it takes LOOONG STROOONG news to ever shake out these hedged shorts.
If anyone here speaks to JANA and VP-Finance please alert them to avoid this tempting trap of issuing convertibles to reduce interest load. It just Ain't the way to go for a stock where shareholders want to make money on share appreciation, not future dividend streams like some utility.
Word to de wise.....
GO HWYM -- You can easily more than double in the year 2000.