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Strategies & Market Trends : Value Investing
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To: Keith J who wrote (14615)6/12/2002 3:10:50 PM
From: Bob Rudd  Read Replies (1) of 78595
 
Keith wrote:<<As long as AES has enough liquidity, it shouldn't be a problem.>>This sort of thing isn't really about liquidity, it's about unlimited dilution. Here's a couple of articles on how toxic converts work: thestreet.com
thestreet.com
They're not used much any more since the street 'gets it' about where they lead, but it's still good to be able to recognize the basic proposition - lower prices =>more shares => lower prices and how convert holders can profit while shorting the common to zero.
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