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Microcap & Penny Stocks : MVSI Brighter future
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To: TheInvestor who wrote (1276)10/10/1997 3:28:00 PM
From: Joe Btfsplk   of 1287
 
>I think the discussion on warrants is complete

Nope:

"From: dwjatwwk@aol.com (DWJ at WWK)
Date: 10 Oct 1997 15:19:39 EDT

Since I can't post to SI, hopefully this will find its way there as well.

Comments have been made about when MVSI would call the warrants. They can call them after 20 consecutive trading days with the stock closing above 8. Comments on SI were that sources had indicated that MVSI had no intention of calling the warrants. Of course there was a great deal of discussion as to whether this was BS or not.

I talked to The General a few weeks back and he told me that he had no intention of calling in the warrants if they didn't need the cash. He said if the stock price moves up nicely and fund managers take an interest he would see no need for the cash. He understood the possible impact on the stock as a result. Since the impact wasn't fully discussed on SI, here are my two cents.

Calling the warrants puts a lot of small investors in a pinch since they have to come up with $4 per warrant. So a whole bunch of warrant holders (including those holding the warrants in Keoghs and IRAs where they can't just add cash) sell their positions. This puts downward price pressure on the warrants and, likely, the common. The conversion then adds to the common stock outstanding causing the PE to go up. The PE then gets corrected by the
market with further pressure on common pricing. After the fiasco with Stratton, it is unlikely that MVSI would do anything to create instability in stock prices."
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