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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: xcr600 who wrote (9480)	7/12/1999 7:45:00 PM
From: Rande Is	Read Replies (1) \| Respond to of 57584

Perhaps another call to the company will clear up any misconceptions. . . this time, we will get specific. . . right from horses mouth on exactly WHICH deals converted at what prices and what might be lingering. The short selling going on at 6 bucks is local. . . if it were those with 6 mil . . .the size would be higher and harder to overcome. . . remember they were shorting at 5 and at 5 1/4 just a few days ago and the shorting has been going on for 2-3 months. So this is nothing new. Nor does it change anything, IMO. Rande Is

To: xcr600 who wrote (9480)	7/12/1999 7:56:00 PM
From: david james	Read Replies (1) \| Respond to of 57584

The problem with that scenario is that St. Annes (the holder of the credit line) would not know in advance when BDE will ask for credit and it is unlikely to be in a lump sum. Remember that the price of conversion is determined by the price of the stock at the time BDE asks for the cash. It is not up to St. Annes. According to their release, BDE might ask for credit 'from time to time'. And I doubt St. Annes would want to hold it down below 6 while they wait and hope BDE will come to them. Since St Annes would get their shares for $6, it would seem more advantageous to let it run and make money on the difference. Suppose that St. Annes shorted it down to $5 and then the Prince or some institution offered to invest another $5 mill in a private placement? The stock could take off and St. Annes would be caught 'short'. Why would St. Annes take that risk? BDE has $4.5 mill in cash which should last a couple quarters depending on how well Superman etc does. Entertaindom is now scheduled to open 'late summer' (I called). And Time Warner is putting a lot of work into making this an impressive interactive site. dailynews.yahoo.com By mid fall, I suspect the auction channel will be broadcast throughout the U.S. and Europe and Christies will plan to have some extremely visible auction to show off the size of the potential audience. Will St. Annes continue to hold it down for the next 6 months in the hope that BDE asks them for credit? This seems unlikely to me. The private placement by the 7 investors makes any conversion unlikely. But who knows, maybe BDE will ask for $500k when the stock crosses 8, which will put a lid on the stock for a few days. But once BDE asks for the cash, the price of the shares is determined. At that point, it is in St. Annes interest to see the stock as high as possible - maximizing their own return. Driving the stock down would hurt their return. Again, all this assumes that BDE draws on the credit line. There is a decent chance this will never happen. David