Utha,
To continue my take on the share conversion,...........
You mentioned that you have 37 preferred shares certificate. It means that you owned 18,500 shares of common stocks as of record date July 16th 2001 for you to qualify for the preferred shares.
Your 37 preferred share certificate now has a value of $500 per share for a total of $18,500 to be converted into common stocks by July 16th 2002. Using my imagine 20 cents conversion price (20 trading days average closing price of bid and ask) I mentioned on my previous post, my calculation is as follow:
a) 37 ps X $500 = $18,500 dollars
b) 20 cents X 90%= 18 cents (average price using for conversion)
c) $18,500 / .18 = 102,777 shares of common stocks you will get when you exercise the conversion (this is only a guestimate figure using a high average price, your shares will be more if the average price I use for conversion is much less than what I guestimate).
Talking about dilution, there will be hundreds if not thousands of Utha (shareholders) like you out there, this can add 75M-100M shares into the trading market. The dilution here is astronomical. And with the current authorized share at 99M, there will not be enough shares to support this dividend on the company book. (I am still trying to figure out the management intention here, as it does not make any sense at all).
Now, let's talk about the process of doing the conversion. My understanding is:
1) You will send the certificate to your broker together with a copy of the dividend PRs from last July 2001 (so he can understand what you are talking about). The broker will then contact the Stock Transfer Agent of ETCR on your behalf.
2) The Stock Transfer Agent will verify the shares that you currently holding with Ameritrade and qualify you for the conversion. They will then determine the average price using the 20 days preceeding the day you give notice to covert. After the shares being calculated, they will notify ETCR management about your qualification and the number of shares, the shares will then deposited into your account automatically via wire notification. On a rare occasion, you may get a common stock certificate by mail from the stock transfer agent. You will then send the certificate to your broker, deposit it into your account to become free trading shares (this method is rarely done now these day).
The shares from the dividend are new shares issued by ETCR via their stock transfer agents. These new shares come from ETCR coffer, not from open market, and the MMs has nothing to do with this except that they will be notify that there will be millions of new shares hitting the market. Their job is to buy and sell these shares and conduct an orderly market for ETCR stocks. (did I forget to mention that their job is to also manipulate the market to line their pockets with profit also...lol).
I suggest that you call ETCR stock transfer agent for more details. Here is their address and phone number:
Signature Stock Transfer, Inc.
14675 Midway Road, suite 221
Addison, Texas 75001
Phone: (972) 788-4193
When calling the Stock transfer Agent, it would be wise to ask them the current O/S shares of ETCR, how many are float? how many are restricted? How many shares are insiders are holding (don't think they will give you this info)?. How many preferred shares issued from last July? Process of doing the conversion, etc.... It would be interesting for me to know also so I can plan my trading strategy accordingly. Keep in mind that the stock transfer agent is an independent company who represent many public companies, they work as a liason for ETCR, shareholders, and the stock market.
Hope this help....! Remember that this is my opinion only, and you must verify the info to plan your move. I am not responsible for your trades nor giving you advice. :)
Good luck!
Dai |
