Global Crossing - GX (formerly GBLX) Message Board

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Technology Stocks : Global Crossing - GX (formerly GBLX)

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To: Robert Sheldon who wrote (2960)	10/29/1999 4:06:00 PM
From: stilts	Read Replies (2) of 15615

I agree. I look at it this way: it's as if GBLX has done a secondary offering for $45 per share for about 22 million shares ($1 billion divided by the exercise price of $45 equals approx 22 million shares). That's less than 3% of the outstanding shares (for a price that is almost triple the original ipo price). Yes, they will incur a little dividend expense at 6 3/8%, but that's much cheaper than debt, and, since it's preferred stock, not debt, the company's bond ratings won't be affected negatively. When a company issues a convertible, there are math-whiz arbs who buy the convertible and short the outstanding common, which is what is happening now. stilts

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