Description

Softnet Systems has been throught he wringer. Their greatest skill was in raising capital for high speed cable internet access and airport internet connections- both discontinued. Their only business now is internet connections to the US backbone via satellite aimed at ISP's. They ahve gone from 552 employees down to 80. The attraction here is cash. They had $130 million or $5 per share at 12/31 and no debt. They project cash of 70-80 million as of 6/30 when all their restructuring accruals for severance,etc. are paid or $3 a share. The continuing burn will be low and the takeover appeal will be huge. This company has two large holders Pacific Century Cyberworks with 18.8% and two board seats and Mediacom LLC with 13%. Mgmt holdings are very negligible and turnover has been huge. This company is a sitting duck if Pacific Century wants to cash out(they appear to be in need of cash.) This is a company that can be liquidated or bought out with a few phone calls. $75 million and a public shell with huge tax loss carryforwards is nothing to sneeze at with the IPO window shut.

Catalyst

Liquidation or large cash dividend necessitated by large holders need for cash.