Zitel-ZITL What's Happening Message Board

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Technology Stocks : Zitel-ZITL What's Happening

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To: Roger A. Babb who wrote (7466)	5/30/1997 12:06:00 AM
From: Jon Tara	of 18263

[A bit off-topic - Curtis-Mathes] Roger, I haven't read the 8K. But it sounds like a very similar deal to one that Curtis-Mathes recently did. The overseas "investors" in Curtis-Mathes only make 25% regardless of which way the stock goes. (But in their case, they make 25% even if it stands still!) What C-M did was sell 1,500 shares of covertable preferred stock, at $1000/share. They have a right to convert at a price 25% below the average bid for 5 days before conversion, and each share converts to a number of shares of common equal to $1000 divided by that discounted price. If the stock drops enough, of course they effectively own the company! They also did a "debt" deal that is similar. (The company proudly points to their "$10M line of revolving credit", which is, in fact, convertable debt.) I'd love to short C-M, except that it's already a penny stock, and too cheap to margin. However, an opportunity may arise when/if they manage to pump this dog over $5.

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