Are you through now, Paul?
<<Larry, you've been telling us Castle Creek can't lose, even if Valence collapses. >> Yes Paul. The reason deals like this are made (floorless conversion priveleges) are set up this way is because it is a high risk investment that no institutional investor would touch at a fixed price.
<<In summary, you say that Castle Creek did not invest in Valence expecting them to succeed, and they plan to make money whether Valence succeeds or fails.>> That is exactly correct. In fact, I think one would be foolish to assume that Castle Creek would set up the deal this way and not take advantage of the tools (hedging their bets by shorting the stock) provided.
<<But now the SEC filings and short interest reports aren't quite matching up with your theory. >> Sure they do. The shares outstanding question has nothing to do with this theory. The short interest reports have indicated a large increase in the short position since Castle Creek got involved.
<<Although it is still uncertain whether Castle Creek has shorted shares and if so how many shares they have shorted>> You previously claimed that because there was no change in beneficial ownership statement filed, Castle Creek could not possibly have shorted. You apparently are now acknowledging you are wrong on that issue.
<<I believe that Castle Creek has shorted less than 300,000 shares as a hedge, if any, and thus the bulk of the $15M they have invested in Valence is still at risk.>> At least you are acknowledging that your previous claim that they couldn't have possibly shorted was wrong. But what's the basis for your belief they have shorted less than 300,000 shares? Your wishful thinking? The short interest has increased by a lot more than 300,000 shares since Castle Creek became involved.
<<We will find out more when the next short interest report is released. If your theory, and Zeev's assertion today that they may already shorted to hedge half the preferred B position, are correct, then the next short interest report should show an increase in open short position of over 600,000 shares>>
I have never claimed to know exactly how much of their position is hedged. Nor have I made any prediction as to how much the short interest will increase during any period. I simply point out it has increased substantially since July 27, 1998.
<<Your theories are starting to unravel.>>
They are? I see nothing in your flurry of posts that provides any evidence to suggest my theory is unraveling. Again, Castle Creek would be foolish not to use the tools (hedging their position) that the terms of the financing allow. |
