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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: Tim J. Flick who wrote (12554)	3/12/1998 11:07:00 PM
From: Zebra 365	Read Replies (2) of 31646

<<<MM's short stock believing that most of this supply will come in for them to cover their shorts.>>> Tim, Warrant holders may also short to cover conversion costs.... Let's say you have 1000 TAVAW (ignore the price you paid, doesn't matter) You need $3500 to convert your warrants (one TAVAW warrant plus $3.50 gets you one TAVA share. TAVA is trading at 9. You short 400 shares of TAVA and receive $3600. You now have 1000 TAVAW, $3600 cash, and you owe 400 TAVA. Deliver 1000 TAVAW and $3500 cash, and receive 1000 TAVA You now have 1000 TAVA, owe 400 TAVA and have $100 cash Deliver the 400 TAVA against your short, and you wind up with 600 TAVA free and clear, and $100 (course your broker has taken that in the commissions I didn't count.) That was my plan to convert my TAVAW, until Schwab refused to margin TAVA, so I sold them outright before the call. But it does illustrate how a warrant call can put down pressure on the stock price without the help of the evil MM's. Zebra

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