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Technology Stocks : Apple Inc.

AAPL 278.28

+0.1%

Dec 12 9:30 AM EST

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To: Ludo who wrote (9459)	3/14/1998 1:33:00 PM
From: J R KARY	of 213176

Ludo AAPL's conv. bonds at 6% did not appear to be "income grade" From my "12/97 remember" but the converts can be cnv'd at any price other than the stated ($29 by 2002 ?) . The holders are savy investors as is Dr. Gil who saved AAPL the going rate for a high risk placement of this sort (5% ?) . This saving I suspect was the basis for old board's approving the $5 mln loan and his banner bonus . I tried to purchase some of the bonds and found it was virtually impossible so I suspect Dr Gil had other ways in mind for the bonds to be traded if not converted . From EDGAR filings it "appears" some of the conversion has occurred but no conversion price is listed . The converted shares were then placed in "trust" with many investment bankers . AAPL was (12/97) selling around $14/shr and Power's dilution at $14.25/shr was looming (occurred on 1/19/98 at $19 +) and it just didn't add up . A possibility was (12/97) these shares would be placed at "option" for a very profitable ride back up (beyond $29) and to be sold later in block with the remaining (unconverted) bonds to a "interested investor". It was speculation then , was posted here as that , but maybe Dr. Gil had a developed a method where a buyer could position himself without having to disclose prematurely . Skipping the speculation , these savy bondholders know their conversion will be "mildly" dilutive , actually help the bottom line by relieving interest charges, and would probably cause shares to appreciate . Research the Sept. and Dec. EDGARS for more accurate detail. Jim K.

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