Shorting stocks: Broken stocks - Analysis Message Board

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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis

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To: Mama Bear who wrote (1116)	6/6/1998 1:31:00 PM
From: Doug Shapiro	Read Replies (1) of 2506

A gem indeed. The S-1 suggests that the lawsuit(which is under appeal) brought by Randall awarded $450,000. This would essentially bankrupt the company as they are short on cash but this is no problem as I see the company just registered to sell 2 mil shares but then I read that the company receives none of the money. It goes to selling shareholders. They also had this sale of preferred stock for $5 million in April but I don't see this amount entered under cash in the assets. So where is the $5 million from the sale of pref. stock and who in their right mind would buy this unless it has them protected against losses? The conversion of the pref. stock is at $9.73 until July when it can be converted at a small discount to the market. Is this what you call a floorless convertible? They can always sell on the way down for a small discount to the market price? They are owed money from AHN American Health Network? So I need to check them out to see if they are going to pay up. If they can then that would give IVIP breathing room. Thanks for mining this gem. Doug

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