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jaretwilson 7 posts  |  Last Activity: 12 hours ago Member since: Oct 18, 2006
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  • Reply to

    Vote

    by jaretwilson 13 hours ago
    jaretwilson jaretwilson 12 hours ago Flag

    Hey Sean. I think it's a lot easier said than done to replace the board, especially when we already have a deal on the table to eliminate them completely. The consolidation would already return our Bermuda cash to us, plus some more. If the Tsinghua investment goes through that dilutes us regardless of what happens with the merger, and we definitely want it to go through because China can provide us with a lot of growth if things go right.

    The only way to be sure that they are aligned with our interests is for us to hold ADSs. We will then be treated just as fairly as Taiwanese investors and can get the same dividends etc. Until then there may be unequal treatment and money will continue to leak out from the current complex structure.

  • jaretwilson by jaretwilson 13 hours ago Flag

    Hi guys,
    Like most of you I've been very frustrated with this underwhelming consolidation. We've had to wait far too long with too little to show for it. However, I talked to SK earlier this week and it only reinforced my belief that voting against it will only leave us worse off. Let's look at our alternatives.

    Approval: IMOS shares would be worth $23.08 by today's price, and that's a real price, not one supported by the 8150 buyback which ended a couple of weeks ago. We would get a decent premium on the small number of shares that 8150 is buying from us. We would receive $1.20 dividend (or $.85 if the Tsinghua private placement is approved) after the merger.

    Rejection: Shares would likely drop a lot from this already low level. ChipMOS Bermuda would likely still not use the Bermuda cash on smart buybacks. We would continue to lose 20% when ChipMOS Taiwan dividends to Bermuda, and then Bermuda would continue to hoard our cash and pay out a paltry $.14 dividend. We would be stuck with the same board members that have not looked after our interests. ChipMOS Bermuda is costing us a couple of million dollars a year for auditors, board member fees, etc...for a shell company! And that's excluding the cost to both companies to hire Wells Fargo and Credit Suisse in connection with the consolidation. It would also be unlikely that private equity or other Taiwanese companies would consider acquiring ChipMOS because the structure is too complex to make it feasible. It would also take a long time before they could put a new offer on the table and might hinder business opportunities with entities such as Tsinghua.

    I know it's tempting to turn this offer down out of spite, but you'll only be hurting yourself. My fund voted in favor of the merger, and I suggest you do too. It just takes a minute - call 877-777-8133 and they can look you up with just your name and address. If you've already voted, you can still change your vote. Don't waste the value of your investment.

  • Reply to

    Put up or shut up

    by sean777007 Jun 18, 2016 5:44 PM
    jaretwilson jaretwilson Jun 26, 2016 3:51 PM Flag

    I miss exchanging with you guys on here, but unfortunately I'm much busier lately. I'm still actively following the company, though like many of you I'm frustrated by some missed opportunities, such as proper use of the cash for buybacks at low prices. If the Tsinghua investment goes through, the company will have a real mountain of cash, and it will be important that we see that it's used prudently.

  • jaretwilson jaretwilson May 22, 2016 5:47 AM Flag

    "What makes you think the warrants/notes/options won't eventually be converted and have a dilutive effect on the share price?" - Of course most or all of them will be converted -- that's the whole point. The dilution happens when they are issued (if they are in the money), not converted, because it is assumed that they will be converted if they are in the money, and that is why an investor uses the "fully diluted" share count as the number of shares, and not the number of ordinary shares. I would recommend getting a book on investing for these basic concepts.

  • jaretwilson jaretwilson May 21, 2016 8:30 PM Flag

    livininisrael, I'll use Q4 2014 as an example. You said it was 66.471 million shares.

    From the Q4 2014 earnings release: "Weighted average number of ordinary shares used to calculate the above diluted earnings per share includes only securities that have a Dilutive Effect, as such term is defined by GAAP requirements. However, fully diluted share count as of February 15, 2015 includes, in addition to the 65 million ordinary shares as of the same date, 4 million shares underlying capital notes, 14 million possible shares underlying notes series F (unless repayable with cash), 15 million possible shares underlying options and warrants and 6 million possible shares underlying Jazz notes due December 2018 (unless repayable with cash). The company had 65 million ordinary shares as stated above as of February 15, 2015, as compared with 58 million as of December 31, 2014, with the increase primarily attributed to bonds series F conversion to 7 million shares occurred in the market during this period."

    So, it was approximately 65 + 4 + 14 + 15 + 6 = 104 million. Today, it's about 107 million after 3.3 million shares used to purchase the San Antonio fab (although perhaps 2 million of those 107 million are out of the money). Dilution from end of 2014 to mid 2016 = 3.3 million shares.

    You've been posting over and over for years about the "constant dilution." In recent years it has been conversion, not dilution, as has been said many times. In fact it's stated right there in the last sentence, "with the increase primarily attributed to bonds series F conversion to 7 million shares occurred in the market during this period." An ordinary share, a warrant, an option, a convertible bond, they are all potential shares when considering the fully diluted share count. You have only been counting ordinary shares.

  • jaretwilson jaretwilson May 19, 2016 12:46 PM Flag

    livininisrael, are you intentionally misunderstanding things? The fully diluted share count is around 105 million, or up to 107 million including out of the money options. What you are indicating with the numbers above is not further dilution, but conversion of bonds and options that already existed and were already in the money. This is clearly shown by the fully diluted share count. For an example, here is a passage from the Q4 2015 press release:

    "Fully diluted share count is comprised as follows: 86 million outstanding shares as of the date of this release, 12 million possible shares underlying options and warrants, 3 million underlying capital notes and 6 million underlying convertible bonds (unless repayable with cash), totaling to 107 million."

    Conversion and dilution are two very different things. The last significant actual dilution Tower did was 3.3 million shares to buy the Maxim fab. However, the numbers you used above are not dilution.

    You should read about fundamental concepts like this before investing further.

  • Reply to

    Monday cc

    by scbest May 6, 2016 1:45 PM
    jaretwilson jaretwilson May 9, 2016 8:45 AM Flag

    There's no point in asking that. You already know that the answer is because the gross margin figure you mentioned excludes depreciation, it's not the GAAP figure.