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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper
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To: H-Man who wrote (2667)6/6/1998 12:10:00 PM
From: Ga Bard  Read Replies (3) of 4142
 
Ok H ... Here is my orignal thought on the P conversion and why... The P gets shareholders voting rights for the long term investors. They are entitled to dividends and so forth in the future.

As I am learning more and more about arbitrage I am discovering that the one thing you do want to set up in a stock is arbitrage. This is why a lot of P never converts. Now if the common should happen to go above the warrants then arbitrage will happen. Another words the warrants will be exercised and the common sold for no risk profit.

Also no shares are held. This is a day traders dream I grant you. This is why I am steadily working on how we can if we hte P shareholders do convert and not set up arbitrage. Now this is being a problem with the P right now at an AMSC of .46 and the common at .75 there is a .30 gain instantly (No risk arbitrage) should the P be optional conversion.

Instead if we make the P conversion to Oct 1999 anyone short on the P will have to pay the interest on their short position and any dividends are adding to the short position. Another words extending the P conversion mails those we hate most ... day traders. arbitraguers, shorters. I would agree to optional conversion only if the P is higher than the common say 25%. Heck there is no way anyone would sell the common for a loss.

Just remember there are those that love to make "no risk" trades. That is why I am some talked me into the optional from my orginal stand or just extending every year. Liquidity can be done because there is a market on the P.

Eventually they are going to get a JV and so forth and the P will attract long term investors which will definitely hit the P without a doubt because it is so dang low.

However they are advoctes who want full value and optional they think will get the P realized value. Well that I doubt because of arbitrage. People that do not consider the dynamics of shorters and day traders typically get nailed.

Hey I could be wrong but that is story and I am sticking to hit.

1.) Extend the P conversion to Oct 1999.
2.) No Optional unless the value of the P exceeds the common.

GB
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