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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: Larry Livingston who wrote (4846)	8/5/1999 3:29:00 PM
From: Harry J.	Respond to of 6846

". . . Your bargain would vanish and you would have been better off with an outright purchase of QWST now." If I buy 1,000 shares of QWST @ $27 today and QWST moves to $40 at conversion (which would make the Conversion Ratio 1.72932), I would hold $40,000 worth of shares of QWST at conversion. If, instead, I buy $27,000 worth of USW today at $55, I pick up about 490 shares of USW. If QWST is at $40 at conversion, my 490 shares of USW become 847 shares of QWST which, at $40 per, are worth $33,895. In other words, I could have a capital gain of $6,895 with USW bought today instead of $13,000 with QWST bought today. But, the QWST price may not go up. If, in such a case, I buy 1,000 of QWST today and QWST stays at (or below) $28.26 which makes the CR 2.44161, I would hold $28,260 (or comparably less) worth of QWST shares. Buying $27,000 of USW @ $55 today still gives me 490 shares of USW which, at 2.44161, would give me 1,196 QWST shares worth altogether about $33,799 (or less) at conversion. In other words, I could have a capital gain of $6,799 (or less) with USW bought today instead of $1,260 (or less) with QWST bought today. And if the QWST price goes down to, say, $22 at conversion, my 490 USW shares after conversion to 1,196 QWST shares would be worth about $26,300 (cap loss of about $690) compared to a cap loss of $5,000 on 1,000 QWST shares bought today @ $27. No wonder shorting QWST makes sense right now. Wonder if "they" are using the proceeds to buy USW? Regards and thanks, Harry PS - I have no usable cash I want to put toward QWST/USW so all this discussion is hypothetical for me. Is why I left off commissions, taxes, etc.