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Non-Tech : Action Performance....ACTN
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To: CMS27 who wrote (156)5/11/1999 11:16:00 AM
From: Stoctrash  Read Replies (1) of 278
 
Scott, big money guys(bank, hedge funds) will try to play it like this, or it's my understanding this is how it works:

They buy the Convertible Bonds and then short the stock as a hedge..that way they collect the interest risk free on the bonds they own..and with the dilution hopefully the stock will go down and they cover their short and make money on that too. This happens ALL the time with small float Convertible bond offerings in high growth small caps.
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