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EDAP TMS SA Message Board

  • ulgxlong ulgxlong Oct 6, 2000 10:45 AM Flag

    CONFUSION

    As I understand the deal between ulgx and
    edap,edap the co. still exists after selling 1 product
    line. The price ULGX PAID FOR THAT PRODUCT LINE MERELY
    REPRESENTS A WILLING SELLER, WILLING BUYER AGREEMENT. The
    effect of the deal imo will enhance ULGX and may help
    EDAP become a more viable co. down the
    road.
    ULGXLONG

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    • Thanks to you folks for the
      feedback.

      ULGXlong, I realize that ULGX did not purchase
      EDAP,
      only EDAP's major product line, but that still does
      not explain why EDAPs value has not increased by the
      $20 m in cash and stock, at least in terms of stock
      price.

      One explanation is that the market is
      inefficient and people do not realize this, but I try to
      resort to this explanation only if all the others don't
      pan out. Some alternative explanations... just
      guessing:

      1. EDAP stock should be worth at least what ULGX
      paid divided by the number of EDAP shares... over $2
      per share.

      2. Investors think that EDAP will
      waste most of the $20 million instead of returning it
      to shareholders (buy back, etc) or putting it to
      good use. This assumes that EDAP will not be bought
      out with a value of $20 and at a price based on
      market cap based on stock price of $8.

      3.
      Although the press releases by EDAP and ULGX seem to
      indicate the ULGX paid $20 mil to EDAP, this is somehow
      not true (?) and the money is going elsewhere, or
      restricted in some manner in which EDAP shareholders will
      not benefit.

      What do you folks think? (1),
      (2), or (3)?
      Or none of the
      above?

      Sincerely, Bogusmammon

      • 2 Replies to bogusmammon
      • EDAPY has 7.79 million shares outstanding
        according to the Yahoo profile. $20 million divided by 7.79
        million equals $2.57.... and EDAPY has more products in
        the pipeline.
        Book value before the deal is $1.56
        per share. After the deal, it has to be a minimum of
        $2.57 (unless ULGX price drops).
        Volume in small
        stocks has been very low lately. As soon as investors
        wake up and start looking again, this stock will
        quickly move above $2 and should be trading above $3.
        (IMO)

        Good Luck to All,
        small_cap_tech_watch
        Penny
        Stock Investment Club

      • My conclusion, fwiw, is patience will be
        required. I expectation this procedure will do exceedingly
        well and that edapy<the company> will benefit
        from it.
        In terms of your proposals, I would
        expect that there are some restrictions on the sale.
        imo.

 
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