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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Roger A. Babb who wrote (14326)10/3/1998 1:23:00 AM
From: chester lee  Read Replies (1) of 18691
 
Roger,

<<Just another variation of floorless convertibles. >>

Within the plausible framework of events as you have described, the "equity credit line" deals are NO longer floorless. The issuing company's ability to time and limit the amount of shares makes the financing deal a discount convertible, but not floorless. The floorless feature comes when there is a financial incentive for the convertible buyers to i order to drive down the stock price. By limiting the dollar amount and choosing the timing, the issuing company can "manage" the amount of converting, so that its stock priced isn't mercilessly pounded.

I'm assuming that the issuing company isn;t going to sell more stock (at a discount) until the buyers have converted.

chester
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