Death Spiral Preferred Thread Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Death Spiral Preferred Thread

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: George Dawson who wrote (27)	10/8/1998 5:11:00 PM
From: Bruce A. Thompson	Read Replies (1) of 47

George, Unwinding is nearly painless and, if done properly, doesn't even have to happen. First you create the box by shorting enough stock to fund your purchase of the convertibiles. Then you short some more after the public begins to realize what is going on. As the stock begins to tank, sell more short driving the price even lower. If the stock begins to combat the trend and rises some, just convert enough of your preferred to scare the market with the dilution. Remember, the conversion does not affect the balance sheet. It just adds more shares. Then, after intimidating the stock price back down, short some more. By now, your cash position is so fat you could almost short the entire float. If it is not, just convert some more and sell them. If you are really good at it like the boys that slayed CTYS then the company will be on the rocks and will file bankruptcy for you and cancell the common stock so you won't have to unwind at all since they will pay you back for your remaining preferreds in cash in the liquidation. Now that's investing! Bruce

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next