FRANKLIN TELECOM (FTEL) Message Board

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Microcap & Penny Stocks : FRANKLIN TELECOM (FTEL)

FTEL 0.802

-7.9%

Nov 17 3:58 PM EST

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To: vic klimpl who wrote (36434)	7/20/1998 2:13:00 PM
From: Kenneth Yeh	Read Replies (1) of 41046

Motivations for Shorting FTEL... Prior to the conversion date of FTEL warrants, warrant holders can purposely short FTEL to get a better conversion price. The lower the price on the date of the conversion, the more common shares these warrant holders can receive. Let's assume these warrant holders shorted the stock from $3/shr to $2/shr. Sure, they would need to short a lot of shares in order to drive the price that low. However, at $2/shr, they can convert their warrants into more FTEL commons (compared to $3/shr) that they can use to cover their short positions. In essence, these warrant holders can make a lot of money by shorting FTEL and driving the price down. I suspect that may be what's happening right now...did that make any sense? Any comments are welcome. -Kenneth

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