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Technology Stocks : Corvis Corporation (CORV)
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To: Iceman2004 who wrote (2754)11/3/2004 10:34:50 AM
From: Cosmo Daisey  Read Replies (1) of 2772
 
Hard to be positive about a stock in a death spiral. BWNG is paying debt with unregistered stock. This stock is not included in the float so it's hard to determine how much there is. Latest payment is shares for prin/int. on notes due, about 34.5 million dollars. Number of shares to be determined by average price of stock for 20 trading days before Nov. 15th. The people receiving the stock typically sell short before they get the stock and use the unregistered shares to cover when they are registered one year later. The lower the price goes the more stock they get. This round could be between 10 and 15 million shares depending on how low they push it with shorting. Lets say they short five million shares at average of $6 and can push the price down to $3 with more shorting, They get $3 stock to cover their $6 short. They could make 20 to 30 million extra on the 34.5 million they are owed. This is know as a death spiral.
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