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Technology Stocks : CDRD (CD Radio)
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To: John McPherson who wrote (770)2/5/1999 11:22:00 PM
From: Dale Baker   of 904
 
Trickery is too strong a word; they arranged discount convertible financing, then persuaded the holders to roll it over into new financing instead of cashing out with new common stock and diluting CDRD too badly. But either the debt has to be paid or the stock diluted eventually. They just postponed the inevitable.

When I was shorting CDRD back in 1997 (very profitable in the end - before it took off again) I heard several anecdotes of brokers cold calling retirees to buy CDRD.

Since this was a wing and a prayer investment (or a satellite and a gizmo to be more precise) I think LEH did expect them to at least meet their schedule. Could be LOR's fault, though, and the delays in the chip sets from LU.

BTW, LOR is financing the satellites which they are building and launching for CDRD; if CDRD falls behind financially LOR can just repossess the hardware and sell it to someone else. Keep an eye on that if you are long.

If my portfolio had a few more zeroes I would pick up some CDRD just on spec. But I will just watch instead.

Good luck.
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