Since you seem to be patting yourself on the back so much let's show the thread the real you before you dislocate your shoulder. Since you profess so much knowledge in the area of PP's, why the following?
To: compradun (102 )
From: Ditchdigger
Friday, Apr 2 1999 6:48AM ET
Reply # of 105
compradun,congrats on your thread, I just stumbled upon
it..Perhaps you could shed some light(and lead me to where the
info is) on a subject we've been discussing...An investor buys
floorless debs in company xyz, which is a bulletin Board stock
trading under .50. The debs are convertible at a 30% discount to
the average 5 day closing price before conversion..Can (and I
know it's done) they short against these debs using the debs as the
colateral? Can they do this legally(I think it is legal)..how is the
margin requirements etc..taken care of? Here is a post by Zeev, in
reference to this subject..
exchange2000.com
Can the debs be used for the purpose of shorting? Must it be done
naked,and can it legally? Any input would be appreciated..TIA,DD
PS: we know many of these placement are ruthless,Reg S,Reg
D..But is this game being played within the bounds of the law?
EXSO comes to mind, with their Reg S placement,,when
conversion was called,they needed more stock than authorized and
finally settled with the bandits,which leads me to believe it can be
done ,legally (although, this was an offshore reg s..) Hope you can
understand what I am asking...Thanks for any help you may offer..
I like the response even better.
Ditchdigger-
Let respond to the portions of your questions that I can. A
convertible can be shorted just like a regular bond. It is
advantageous to short a bond trading at 30 or 40 than a sub $5
stock because of margin requirements.
See the above margin requirements. You cannot margin a sub-$5.00 BB stock. There can be no shorting against the box in TSIG and you know it. Why don't you go back and review last nights discussion.
Have a nice Easter.
V$gas.Com
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