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Gold/Mining/Energy : Harken Energy Corporation (HEC)
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To: MskiHntr who wrote (3420)8/16/1998 12:14:00 PM
From: Thomas M.  Read Replies (1) of 5504
 
The holders of the "floorless" are entitled to convert their securities into common stock. They are entitled to convert their number of shares into some fixed dollar amount of shares, let's just say $50 million. If the stock was at $5, they could get 10 million shares. If it was at 50&#162, they get 100 million shares. Which do you think the floorless holders would prefer? <g> Normally in convertible preferred securities, there is a limit to the number of shares they can get, i.e. a "floor" in the conversion price. For companies more desperate for capital, the deal is negotiated without such a floor.

Tom
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