Zeev, Barbara, somebody explain this to me!
HEC has announced its intention to buy back up to 5 MM of its common shares.
How can they do this if they're so desperate for cash?
Remember, Barbara, you wrote:
<< If HEC has so much cash, what the heck are they doing going to the
market equivalent of loan sharks? You say this doesn't mean they have no other method of generating the cash, usually, it does. >>
So how can they manage to buy back shares?
Let me guess -- HEC is going to buy back the shares from the owners of the floorless preferreds, making it easier for them to get short!
Oops! That logic doesn't work. It still doesn't explain where the cash comes from. And it supposedly was short-selling by the floorless bandits that got us down to $3 in the first place. Being short already, they couldn't possibly need to short more at higher levels. In fact, as the stock rallies, given the conversion feature, they actually need to be short less!
I'll give you my guess: Management is making a statement. They are not short of cash. Moreover, if anybody thinks they can make money shorting HEC, management may squeeze them itself.
Joe |
