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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (2197)	6/15/1999 9:08:00 PM
From: Rajiv	Read Replies (1) \| Respond to of 19428

but what is the effect of MVIS: (a) hitting the conversion, or (b) missing the conversion? It should go down for both (a) and (b) Or are they exercisable only by the company and never come onto the market? I am not sure what you mean... There are around 2.27 MM warrants (part of the IPO in 1996) being traded with the ticker symbol MVISW. MVIS can force conversion (after the 20 days). The warrantholders will have an option of either selling their warrants or exercising them for $12 There will be downward pressure on the stock as - the artificial support is withdrawn - the warrantholders sell part of their stock/warrants to raise the $$$ required to exercise the warrants. In MVIS's case the % of warrants to the # of outstanding shares/float is high enough to be a significant factor. This is meant to be a short-term play. Usually fundamentals don't matter. In fact, the conversion will provide lot of $$$ for MVIS and free it from any future dilutive deals. Regards. Rajiv

To: Peter V who wrote (2197)	6/15/1999 9:20:00 PM
From: Mama Bear	Respond to of 19428

Peter, as I understand the dynamic, the majority of the warrant holders bought them for leverage, rather than with the intention of exercising them to buy the stock. The warrant call demands that they redeem or be paid a nominal sum, such as .01 or .05 per warrant. Further, the warrant call strips all time premium from the issue. The premium being stripped they start trading at parity with the underlying. This also causes there to be no reason to buy the warrants for leverage. Now, we have an instrument that has no reason to be bought, but a lot of willing sellers. There has to be a reason to buy the warrants, so at this point they start trading at a slight discount. Now enter the arbs, who short sell the stock and buy the available warrants at the slight discount. The arbs will exercise the warrants to cover their short position, so no correspondent buys are made. Add to that the pressure added by opportunistic shorts, who have no desire to buy the warrants. Also smart buyers of the common will stand aside. Until all warrants that the seller either can't or won't exercise have been absorbed by the market can the selling pressure subside. Anyway, that's my crude understanding of why warrant calls cause selling pressure. Barb