I look forward to the response from management. I hope that they have taken some kind of reasonable measures to protect the company and the shareholders.
The following post is useful if you want to follow more about this topic. I think it will help keep up the interest in pursuing this potential danger.
If we can confirm that the danger is neutralized by the co's protective measures, then I am in.
THC
To: +schopenhauer (1238 ) Thursday, Feb 19 1998
From: +Zeev Hed 9:30AM EST
Reply # of 1264
Schopenhauer, instead of going through the whole process of
explaining the horrors of floorless instruments, go and read the
following post:
Message 2484375
on the CTYS thread, it was posted in mid October when the stock
was 7. Now the stock is 1/2. I have made similar analysis in the
case of EXSO in January of 1997 when the stock was 2 to see it
decline to 1/8 or so, I gave similar warnings on CAFE and few
other situations where floorless instruments were used to enrich
a select few on the back of existing stockholders. RNTK sold its
financial soul to the new breed of "financial engineers" on the
street, they have found new imaginative ways to replace the Reg S
shams with various floorless instruments and people see their
equity in those stock diluted by factors of 10 or more.
I do not know if this will happen here, in some rare cases
catastrophe are avoided by management (like AIPN), but the danger
is grave. All you need is one misstep or a failure to deliver on
a promise by management, and the spiral down cannot be arrested.
If you are really interested, read from that post on the dialogue
between me and Sankar, and you will see the stubborness with
which extremely educated people (and Sankar is a brilliant
analyst and a professor of Finance at the University of Chicago)
can hold to the hope that "it will not happen here", a white
knight will appear, or whatever rationalization they chose.
Zeev |
