Harken Energy Corporation (HEC) Message Board

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Gold/Mining/Energy : Harken Energy Corporation (HEC)

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To: MskiHntr who wrote (3427)	8/16/1998 6:00:00 PM
From: SDR-SI	Read Replies (1) of 5504

Mski: As a businessman I, of course, would hope I would not ever be in the position that I could let investors dictate to me terms of a financing that could put me under. I believe that the much discussed concept of floorless financings has yielded dire results for a number of companies that were on the way toward oblivion anyway. I, personally, do not believe that the fact that a floorless exists is a cause of corporate death. I believe it may be an indicator that a company may have resorted to financial terms that could carry the seeds of destruction. But I really think there is a greatly exaggerated confusion of the cause and effect relationship. A company might also agree to a floorless if the management was so sure of ultimate success that they did not feel the need to "protect themselves from below" and allowed such terms into a financing. Their reasons for such might include knowledge that they were reasonably sure they could take out the financing with available cash (but why would one even then do the financing) or might include the knowledge or belief that they were very close to such big news that they didn't have to worry. Much of the discussion about "floorless financing" and "death spirals" revolves around the assumption that the "floorless bandits" can maneuver the price of the stock to their advantage and that knowledgeable people and the rest of the market never responds to return stock pricing to a market-driven equilibrium. IMHO such assumptions do not correspond with reality for on-going companies. The long, protracted discussion of floorless with respect to HEC started in early July. Most people on this thread have disregarded same and tried to get away from more and more discussion of same. IMHO we can get back to looking at HEC as HEC when this side discussion again dissipates. Steve

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