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Technology Stocks : Cymer (CYMI)
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To: Curlton Latts who wrote (8291)11/5/1997 1:18:00 PM
From: Emile Vidrine  Read Replies (9) of 25960
 
My theory Re convertible debentures:

Soon after the buyers completed the purchase of the $47 convertibles, they began to short Cymi. Since they could convert the bonds starting Nov., that means they could short 3.6 million shares. I believe false rumors and news plants were distributed by certain individuals at that time. I believe the bond buyers shorted their 3.6 million shares. Remember, the additional 3.6 million shares from the convertible debentures increased the float to approx. 10 million shares.
The convertible buyers could not go wrong. If the shorting scheme failed, which was impossible considering there was only approx. a float of 6 million, they could always covert their bonds in Nov. and cover their short at $47 and brake even. This was a win win situation.

By dumping 3.6 million shares of a very low float stock like Cymi, they caused a panic and brought the shares to their present level. The panicked small and medium investors dumped their shares. Now they are quietly covering their shorts. When the covering is over, I believe Cymi will go up quickly. The non-covertible shorts may not have figured this out and will be caught in the short squeeze when the covertible guys finish covering. Remember, longterm the covertible guys want the stock to go over 47. This short sale was only and intermediate short play. I have seen this schemed worked before.

After I figured this out, I bought a heavy position in cymi close to its low.

Emile
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