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Strategies & Market Trends : Floorless Preferred Stock/Debenture
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To: Land Shark who wrote (486)6/22/1999 2:22:00 PM
From: Dr. John M. de Castro  Read Replies (1) of 1438
 
As I read the TMSR filings, it appears that the warrants issued have terms that encourage the investors to keep the stock price as high as possibly until July 27.

"The Warrant has two "vesting" dates. The first vesting date is July 2, 1999; the second vesting date is July 27, 1999. The number of shares of Common Stock that will vest and become exercisable on each vesting date is equal to (a) the product of (i) 62,500 multiplied by (ii) $18.00 minus the Reset Price, divided by (b) the Reset Price. The Reset Price is equal to the average of the lowest 10 closing bid prices per share of the Company's Common Stock during the 25 days preceding the applicable vesting date. If the Reset Price for a given period is less than $18.00, no shares will vest and become exercisable on the related vesting date. The exercise price under the Warrant is $0.01 per share. The Warrant expires on October 15, 1999."

Also, as I calculate it, the new convertible cannot be converted before Sept. 7. At that time the conversion price is based upon

"88.89% of the average of the lowest 10 closing bid prices per share of the Company's Common Stock during the 25 trading days preceding the conversion date."

The 25 days begins August 14. From this I would project that the "investors" would not begin shorting the stock till about the beginning of August. I would also conclude that the best time for any of us to short the stock would be around 7/27. Please let me know if you agree or disagree with this analysis.

Best regards
John de C
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