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Technology Stocks : VitalStream Holdings Inc. (VSTH)
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To: pipick who wrote (140)7/22/1998 9:03:00 AM
From: Zeev Hed   of 447
 
pipick, you may be right, but the language describing the conversion uses the term convert at the "Lowest of" i $3.6/share and then the floorless conversion.

The issue was offered in February when the stock was almost twice what it is now. Typically the floorless will turn around and collect their money by shorting against the block of debenture. That create an imbalance that forces the stock down. At lower prices, the debenture (because it is floorless) can support a greater short position, thus the floorless continues to short as the price goes down, until at a given point, they decide that they had made enough. Note, their first shorting give then back all the money they have invested in the debenture, so from there on they are playing with your money. The ceiling is an additional "security blanket" in the unlikely event that the ruse does not result in price debasement of the underlying common. Not the case here.

Zeev
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