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Technology Stocks : MSGI Marketing Services Group Inc. -- Ignore unavailable to you. Want to Upgrade?

To: stock_bull69 who wrote (1886)	8/27/1999 12:51:00 PM
From: Augustus Gloop	Read Replies (2) \| Respond to of 3418

What kind of upside do you folks see in this stock? I was shafted earlier in this stock but have remained as a lurker on the thread.....any thoughts are really welcome. Thanks Naz

To: stock_bull69 who wrote (1886)	8/27/1999 1:13:00 PM
From: Mark Peterson CPA	Read Replies (1) \| Respond to of 3418

Take this with a grain of salt. But something like could have happened, you know? Although I don't personally have the resources to do so, here's the way I would handle a private placement for $24M (a number picked out of the air). Now, you don't build that kind of money just by taking unhedged, net long positions. So, if 30 days ago, I had, in principal, agreed to offer the entire $24M to MSGI, let's say, in the form of warrants to acquire the stock at $12 per share, I'd still want to hedge the risk of the investment. If the stock goes below 12, I lose money. And wize guys just hate to lose money. Makes them look bad. So, I start shorting MSGI around 28. Stock is going down. The fainthearted are getting light headed looking at their portfolio net liquidating values that keep getting smaller and smaller as a result of the decline in MSGI. Some start selling. Others wait. Others double down at 21. I short some more, pushing the stock down further. Now small investors are really getting nervous. There goes the kids college funds, the vacation at the shore, the mad money we were going to use for that big screen TV. And, they want to stop the bleeding. So, they sell. Drives the stock down further. As a wise guy, I appreciate their help and feel for them. But this is about business. Somebody has to win. Their loss is my gain. I watch the volume, the going south direction and figure, hey, this is great. Looks like everyone is bailing on this stock. And I wait until I hear that great big wooshing sound where alot of money goes out of the stock. But hey, no need to be greedy. After all, this decline was only meant to be a temporary thing. All I wanted to do was take some risk out of my $24M investment in convertible warrants that 30 days ago, I was actively "thinking" about doing with management. So I cover my short. All of it. Could have been that block trade the other day at 12 1/4 or a combination of smaller blocks. The same day, we have a leisurely dinner at a nice restaurant. Who's invited? All the wise guys. Their lawyers, my lawyers, and all of the principals involved. So now I have a deal that gives me convertible warrants to buy the stock at a lower price and, I've already realized some of the profit in the deal having shorted the stock on the way down. And in the process, taken a bundle of risk out of the equation. And now that the level of investment risk in this deal has been reduced, I'm willing to sit awhile and wait for the stock to recover to its trading level 30 days ago. Smart money doesn't make deals that unnecessarily puts their capital at risk. Wise guys wouldn't even think about it. JMO Mark A. Peterson