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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: BudLong who wrote (591)	7/9/1999 1:51:00 PM
From: Bald Eagle	Respond to of 1438

Check out TSIG. I got burned on that one. The saga is still ongoing.

To: BudLong who wrote (591)	7/9/1999 1:56:00 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 1438

A very recent case is TSIG, I believe the floorless was set late last year or early this year, that was followed by a bunch of promises (hype). A very recent one just going into motion is CLVE, I think that the floorless used the time window between signing and announcement to get on the bandwagon, it is already down 65% from April. Case histories are given by Timelord in a recent post here. Some of the most damaging have been , CTYS (15 to oblivion), IELSF (4 to near oblivion, and there I gave the warning on the day it hit $4, got out on the spot, despite many "protests" of my fellow longs), CHTL, TTRIF (floorless and less then "honest" management). Just to summarize few of these. By the way, IELSF was a very interesting situation, I sold just because the technical action was bad, huge volume and no price movement, that told me something is wrong. I think it took a month before the tread realized what was going on. I think that before we the public know of a floorless, the bandits, knowing very well what is coming down the pike, since they are putting their John Doe on the bottom line, start their shorting into a news release induced rally. Zeev Zeev

To: BudLong who wrote (591)	7/10/1999 7:13:00 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 1438

BudLong, maybe you take a look on ENML, Enamelon. For quite a time the stock was trading over 4 (October 1998) and up to $10 in Dec 1998. It appears that the company was low of cash (given their foreseeable losses in the next quarters), so they decided to do a new round of financing. Note that they even have a product (the toothpaste). That is: Late Dec 1998, they did a convertible for only $5M, which is was roughly 7% of the market cap of the stock out. So it was relatively small - I estimated the consequences of the convertible not that damaging. In December, the stock traded as high as $10 1/4, and the day of the closing it still stood over $8. techstocks.com What then happened is best described as a massacre. Regardless of the market conditions, or rare news releases, the stock kept on falling on a daily if not hourly basis. Recently it hit $1, putting the market cap of ENML at only $10.9M (without counting in the effects of the conversion, however). Depending on how much is left over from the convertible (in $$$ amount) the drag "could" continue to $0.5, $0.25 ... (so you do not know the floor, if any from which the stock price could emerge again). Indeed, there appears to be no floor for the stock price. I am not aware of a stock performing worse than this one in the last half year, it lost 90%, (except some poor companies who filed for bankruptcy). In the eventual case the nasdaq sent them a delisting letter given they fell under $1 for a longer time, they could reverse split - that has zero consequences for the convertible terms (except raising the ceiling price by a multiple). Usually there is no way to tell when the selling happens, but it appears that it commences quite shortly after the closing and registration of the shares (which was January). is.con