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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today
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To: Toni who wrote (6863)7/20/1998 9:36:00 AM
From: Juli  Read Replies (1) of 19331
 
Toni, a floorless convertible means that the convertibles can be converted at a discount to the market at the time of conversion, no matter what the price of the stock. The tendency is for those buying these convertibles to then short the stock in order to drive the price down and pick the shares up cheap. This was all explained in a Bloomberg article in March of 98. Often, this sets up a spiral in which the stock never recovers. James and others have said that BB stocks cannot be shorted in the US. I have heard that professionals can short BB stocks, but I do not have that on good authority. It seems that many investors shun a stock that is issuing these type of convertibles. What I meant by MZ is that he was very upset by the buyback and dividend, believing that the money could be better spent. If we did indeed end up issuing more of these convertibles at a deep discount to market after the buyback and dividend, then I certainly have to agree with him.

Jewel
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