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Strategies & Market Trends : Floorless Preferred Stock/Debenture
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To: Mama Bear who wrote (877)8/24/1999 2:33:00 PM
From: surelock   of 1438
 
Barb,
Both Rajiv and myself were commenting on a senario presented
in #reply-11046562. The issue being discussed was, as
described in that note "straight debt", not convertible.
Being a close follower of many micro-cap stocks, I can say
it is often
a fact that that the only "asset" these companies have is
their debt. Why call it an asset?
Because this debt can and does get bought
and sold as a commodity, and often ends up being converted
to common shares. The holders of that debt will often
manipulate the share price downwards in order to convert into
as many common shares as possible. As unplausable as this may
sound, it happens regularly, although is most common in
the kinds of extremely small companies that trade on the VSE
and bulletin board. There are no restrictions on the percentage
of a company that might be purchased in this manner, and in
fact in extreme cases, the conversions can result in a change
of control of the company.
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