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Gold/Mining/Energy : Harken Energy Corporation (HEC)
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To: Arktic who wrote (3100)7/4/1998 4:02:00 PM
From: Zeev Hed  Read Replies (2) of 5504
 
Pul, people that invest in floorless, rarely do it for the long term upside potential, they do it to make a fast buck. In this case, they could sell short immediately (or even before paying for the floorless), use the money from the short to pay for the floorless cover at a buck or two lower, already making profit on their investment and continue few more times until the whole floorless is paid. If they still are looking for the long term, they can continue this way spiralling the stock down and getting much more of the stock. Because the financial types at HEC are so smart and creative, you must come to conclusion that their agreeing to a floorless was because their back was to the wall. If the owners of the floorless really want to participate in the long term potential (as you call it) of the Cambulos, why did they not provide the funding at a constant conversion rate?

Zeev
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