Floorless Preferred Stock/Debenture Message Board

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Strategies & Market Trends : Floorless Preferred Stock/Debenture

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To: Zeev Hed who wrote (1200)	7/6/2000 1:22:57 AM
From: Puck	of 1438

Cramer clearly doesn't know what he's talking about, for he fails to mention the key of the floorless excercise (as Zeev has demonstrated): the convertible bond collateralizes the short position. Cramer thinks the short is covered by regular market purchases if the stock prices crashes. He couldn't be wronger. It is unfortunate that his writings are not as enlightening as they could be, given his readership, and may serve to create an unwarranted general fear of completely healthy and useful convertible bonds. After reading his article, a naive CFO still wouldn't know the difference between the two.

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