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Non-Tech : Amati investors
AMTX 1.510-1.6%12:40 PM EST

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To: rgus who wrote (4574)10/15/1996 9:10:00 PM
From: Geof Hollingsworth   of 31386
 
<LET'S ALL DO SOME HOMEWORK!!>

You could, or you could look at the summary posted in message #4508. As I see it, there are at least two problems with Greenberg's "theory". One is that it wouldn't work, the other is that it would be illegal. But other than that, how did you enjoy the play, Mrs. Lincoln?

It wouldn't work for a couple of reasons. First, Soros has no idea when (or if) Amati will put shares to him, so he doesn't have the ability to know at the time he shorts that he can cover with shares from Amati. Second, he doesn't get the cash when he shorts the stock-his broker does, so even if Amati did oblige him by putting stock to him, he has to come up with more cash to pay for them before he can deliver them against his short. This is clearly the most manageable of the two problems, however, for a firm like his.

While I am not an attorney, what Greenberg suggests is almost certainly illegal under the 33/34 Acts, since Soros is a party to the underwriting agreements which are registering the shares and shorting the same stock which you are underwriting sounds like market manipulation (illegal), not market stabilization (legal).

This strikes me as another piece planted by short-sellers and other ill-wishers which Greenberg has again obliged without bothering to check (I can guarantee that he didn't read the S-3 or the investment agreement or anything else longer that a People magazine article). Fortunately, I doubt that anyone serious would act on what he says.

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