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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel
RTK 0.200+5.3%Oct 13 5:00 PM EST

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To: Dnorman who wrote (7134)8/13/1998 10:44:00 AM
From: Zeev Hed  Read Replies (1) of 14347
 
Dnorman: A debenture per say at a fixed conversion price, even under the current market price is not dangerous (in some situations, particularly when the conversion price is under the market, temporary pressure on the stock can be expected from hedging, but no death spiral), the danger is in those instruments (convertible debentures and preferred stock) where the conversion price is tied to a trailing value of the stock itself. Under these circumstances a death spiral almost invariably follows, because it is in the interest of the floorless bandits to see it happen, and they can make it happen with "impunity" (no risk of a short squeeze).

Zeev
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