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

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To: mike RN who wrote (1424)	7/18/1998 7:49:00 AM
From: Q.	Read Replies (1) of 2506

mike, thanks for your kind words. re. ILNK, I haven't paid much attention to it, so until you mentioned it, I hadn't noticed that the stock was doing anything. I covered my short a while back, so I was unable to profit from the recent dip to the 3's. A week ago, they announced another discounted convert deal, this one for $10 M with a 10% discount to market price. The recent plunge and subsequent rebound followed that announcement. I have no way of knowing, though, if the stock was moving due to the news or not. The private placement represents a slightly bigger than the average for these deals. The average deal is ten percent of market cap, and this one is in the teens, at the latest stock price. Considering the nature of the new product they claim to be developing, the stock is probably subject to hype, so volatility wouldn't surprise me. The co. has lousy finances and an unlikely story of how they want to develop the business. I think it is a good broken stock short.

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