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Between July 21, 1992, the date the second restriction
lapsed, and November 11, 1992, the price at which Conner
Malaysia sold the Read-Rite shares increased by $3-1/2 per
share. Thus, by holding the 58,442 shares beyond the date the
second sale restriction lapsed, Conner Malaysia earned an
additional $204,547 over the amount it would have earned if it
had sold the 58,442 shares on the date the restrictions lapsed.
On October 25, 1992, 1 year following the IPO closing date,
the final restriction on sale lapsed. The closing price of
Read-Rite shares at this time was $28-3/8. On November 11,
1992, Conner Malaysia sold all of its remaining Read-Rite shares
(558,441 shares) at an average price of $26-1/2 per share. This
sale yielded proceeds of $14,798,686.50.
Between October 26, 1992 and November 11, 1992, the price
of Read-Rite shares fell by $1-7/8 per share. Thus, by holding
the 558,441 Read-Rite shares beyond the date of the lapse of the
third sales restriction, Conner Malaysia lost $1.05 million in
proceeds that it would have received had it sold the shares on
October 26, 1992.
In 1992, Conner Malaysia received gross proceeds of
$39,188,546 from the sale of the Read-Rite shares. Conner
Malaysia subtracted $16,648,542 (the discounted value of the
Read-Rite Shares) from the gross proceeds of sale and reported a
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