George,
<<I forgot to add that the rate of conversion of 3M shares/month is greater than the proposed rates of a previous model for the maximum conversion rate (post 18764).
Greg, is my arithmetic off or are they really turning over the stock more quickly than we think?>>
If the 15% limit is in place, the Series C shareholders as a group can convert 165 preferred shares/mo. If all of the Series B shares were converted since 8/26/98, this is an additional 299 shares, for a two month total of 629 shares. With the conversion rates in the neighborhood of 10,000 common shares per preferred share for the last couple months, we could have seen as many as 6.29 million new shares issued. We saw only 5.85 million new shares issued.
Also, If there is $7M remaining, this means that only 579 preferred shares were converted, which should have resulted in common shares outstanding of 19.64M. This is pretty close to the reported value of 19.7M.
To answer your question, if they convert at the maximum rate we would see about 1.5M new shares/mo issued (now that Series B is gone). These shares would be sold immediately (long or short) or else held for investment. At this rate, it would take 5 more months to close out Series C. However, it could be closed out by January since the 15% is cumulative. The Citadel Entities did not convert at the maximum rate for the first two months, so they could recover now if they wanted.
What is the end game? I wish I had a clue.
Greg |
