Data Race (NASDAQ: RACE) NEWS! 2 voice/data/fax: ONE LINE! Message Board

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Technology Stocks : Data Race (NASDAQ: RACE) NEWS! 2 voice/data/fax: ONE LINE!

RACE 372.55

+1.9%

3:59 PM EST

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To: Marshall who wrote (25447)	11/13/1997 10:30:00 AM
From: drakes353	Read Replies (2) of 33268

Marshall: I know where they came from. What I said stands. If they were willing to risk the rep, such as it is, of their fledgling firm they would have done a regular equity financing. If these guys, with their longstanding relationship with RACE, won't stand behind them no one will. Well now, couldn't it also be that RACE feels it will be needing the extra money ASAP? Not anything unusual for terms like those to appear. How many of these kinds of deals have you looked at? Based on your earlier response highlighting my comments on the hedging activities of the preferred holders it appears that you still don't understand how this kind of deal works. Let's review....say it's a 10% discount for January 29th. We'll keep it simple, no average pricing. Prior to the close on the day the convert holders want to convert they sell short shares of RACE. As long as their average shorting price is greater than the closing price that day they are guaranteed to make their 10% Example: Short shares at $5, stock closes at $5, convert shares at $4.50, shares issued by RACE upon conversion journal off against the short position. A virtual free ride. Now this scenario can go either way. If the shorting by the convert holders scares off some buyers or causes some stops to get hit they might make more than their 10% as the stock craters. If the stock begins to move up on them after they have their hedge in place they can try to keep the price um, in line by shorting some more. Once they file on this thing (might be part of the 10Q due by Monday) we'll have all the details. I highly recommend that everyone reads the registration document. Bring big buckets of Joe though, the last one put me to sleep more than once. drakes353

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