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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Big Dog who wrote (42315)4/16/1999 8:33:00 AM
From: marc chatman  Read Replies (2) of 95453
 
<<The boys who bought this preferred stock, and I know who they are, have just cut the proverbial hog.>>

Big Dog, without asking you to divulge who these boys are, I have a couple of questions.

Are these buyers likely to have checked out first hand the progress on the new builds in order to make a good judgment whether they will come in on time and on budget?

And, are they likely to have good information on the status of drilling contracts?

Perhaps we can make some assumptions as to FLC's situation if we can answer these questions.

As a general note, this preferred issue was no surprise. The company in previous filings dating to last year indicated they would be attempting to issue $300 million in preferred securities (although I believe they initially thought they would be doing it in the 4th Q of '98).

If these buyers are as "smart" as I think they may be, I would expect a nice little move in FLC. The short-term picture is only getting better, in terms of some risk being taken out of the equation. Longer term, however, they appear to have taken a slice out of my pie. Another consideration is the possibility that the warrant holders will hedge at some point north of 9 1/2 by shorting 10 million shares. I'll be reassessing how long to hold this, but I'm not in any rush to sell.
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