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Technology Stocks : Apple Inc.

AAPL 278.72

+0.5%

3:59 PM EST

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To: Phillip C. Lee who wrote (9478)	3/14/1998 7:40:00 PM
From: Eric Yang	Read Replies (1) of 213176

"It got me a feeling that you seems already out of Apple stock and try to get in with lower prices. Well, there is always a chance next week when the stock is pulling back." No way Phil! I wouldn't try to do an unethical thing like that. I can't try to point out both sides of the coin without being accused of having sold my AAPL stakes? ;-) You've got to give me more credit than that. Everyone on Yahoo knows that I bought more AAQDEs at 1 1/16 last Monday and still hold some AAPL shares that I got way back from end of 97.I did sell some AAQDE at $1 3/4 right before the INTC news two weeks ago, I bought them at $1 I hope that wasn't illegal.<g> The convertible note issue was brought up here and on Yahoo because AAPL has climbed towards the $29.205 mark. I was simply trying to analyze its implication to our investment. If you read my post carefully you'll see that I believe that in the near term the dilution effect of these convertible notes will only be a psychological one. Experienced investors will likely judge AAPL's Q2 performance based on pretax earnings, revenue, market share...etc rather than simply by the fully diluted EPS. After doing some calculation I've come to the conclusion that we won't have to worry about the fully diluted EPS getting more diluted by the convertible notes until 1) AAPL trades above $29.205 AND 2) earnings exceeds about $65. The logic behind it is presented here. messages.yahoo.com@m2.yahoo.com I don't know if note holder short selling AAPL stock is allowed, but if it, such possibility must be recognized. These note holders were willing to put up their $ for a 6% annual return. I don't think many of them would hesitate to lock in their profit at say $39 and earn a $10 (34%) return. In my opinion that would actually be the safe play for conservative bond managers especially considering that it still allows them earn 6% interest in addition to potentially profiting from covering their shorts at a lower price. Eric

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