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Technology Stocks : The New QLogic (ANCR)
QLGC 16.070.0%Aug 24 5:00 PM EST
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To: George Dawson who wrote (18787)10/24/1998 10:13:00 PM
From: Greg Hull  Read Replies (1) of 29386
 
George,

I will respond to your posts from yesterday after I can think about the issues you raise and collect my thoughts.

From today, you stated "I thought the preferred shares would have to be converted before they could be shorted and therefore would be subtracted from the total."

From an earlier post of mine siliconinvestor.com

On a recent re-reading of the S-3 of 9/4/98, I came across the following statement buried on page 17:

"In addition, a Selling Shareholder may, from time to time, sell short the Common Stock of the Company, and in such instances, this Prospectus may be delivered in connection with such short and the Shares offered hereby may be used to cover such short sales."

I interpret these words as saying that shares that are sold short can be borrowed against the unconverted preferred shares, that is against the common share equivalent of the unconverted preferred shares. This equivalent is a function of the conversion price, and can vary.

The preferred shareholders have their own source of borrowable shares. Nothing we do can prevent them from shorting. We can limit the short selling of other individuals, but not those with a Prospectus in their hands.

Greg
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