<<I'll take a stab at this, I'm not sure this is right, but perhaps someone
elce with more knowledge in this area can jump in. O K we have a
preferred stock holder who is going to convert sometime in the future
to common stock. So the holder knows the company is in a flux so
he takes out a short position to put more downward pressure on the
common, because the lower the common goes, the more common
shares he gets when he finishes converting. So now he started
shorting way above the current price, so he is not worried about
covering immediately, and this is the good part, after the conversion
is done he will take some of the common and use that to cover his
short position, in lieu of covering the short by selling the borrowed
shares he shorted in the first place. Make sense ? The bottom line
is he avoids any capital gains tax on the profit from the short, he still
has a boat load of common at a cheap price and all tax free, nice.
Now all the while he has been shorting there are poor fools out there
who will jump on the growing short wagon, not knowing what is
going on and all of a sudden the preferred holder has covered and
left them holding the bag, short squeeze time. Once again with my
limited knowledge of big boy finance, I think this is right.>>
there are always some possibilities, so it's hard to say.
IMO, based on my research, object technology is very much in demand and will be more so in future; one can go to bookstores and one of the most popular books are on object technology. The potential mkt for CAYN is absolutely very big and simeple logic is that for the price of only about 3$, it's a big bargain. |
