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Politics : Ask Michael Burke

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To: Earlie who wrote (30785)	8/9/1998 8:17:00 PM
From: Bipin Prasad	Read Replies (1) of 132070

Hi Earlie, This is very clever way to sell stocks lately. This is very common, more common than any of us might suspect. It's no big deal actually. Sometimes 3-5 parties are involved with this "loan" practice. One will take short position with puts, one gives money to the insider, bank takes collaterals, one invests those left over cash after the insider uses for his/her personal needs....... Almost all insiders uses one of these practices nowadays. We have to worry when IPO insiders uses these loan practices. They need cash for new car, house, anything even within 6 months. I know so many bankers who handles these loans. Even car dealers give cars to these new cash poor riches this way and even home builders build custom built houses for fresh out surgeon who has only $2000 in the bank these days. I wouldn't spend too much time to figure out why this old Mr.Simplot used Canadian Bank and etc. Really, it's no big deal. If my company/ or friends' go public and need to raise some cash for personal use, I would recommend to do so. Somebody has to enjoy the fruit of hard work while s/he is alive. Why not? take care! InSook

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