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

To: Larry Brubaker who wrote (975)	9/21/1999 1:24:00 AM
From: P314159d	Respond to of 1438

If I had a bunch to short I would follow you with a start at 9. But I got caught up in some large shorts and want the nimble trade on the Nets. I am only looking at about $10K and figure i can get started tomorrow if need be.

To: Larry Brubaker who wrote (975)	9/27/1999 7:45:00 PM
From: xcr600	Read Replies (1) \| Respond to of 1438

Webb just filed an S-3 for 1.13mln shares. I smell dilution! Here is a linkMax offering price $11.63 freeedgar.com Here is the excerpt mentioning the floorless The common stock issuable upon conversion of our convertible notes may significantly increase the supply of our common stock in the public market, which may cause our stock price to decline. On August 25, 1999, we issued $5,000,000 aggregate principal amount of convertible notes and a warrant to purchase 136,519 shares of Common Stock. The convertible notes will become convertible on December 23, 1999, if not redeemed earlier, into a number of shares of common stock as is determined by dividing the principal amount of the convertible notes by the lesser of: . a fixed conversion price which is initially $11.44 per share, but will be increased under the terms of the convertible notes; and . the floating market price of our common stock at the time of conversion. The number of shares of common stock that may ultimately be issued upon conversion is presently indeterminable and could fluctuate significantly. Purchasers of common stock could therefore experience substantial dilution upon conversion of the convertible notes. To illustrate the potential dilution that may occur upon conversion of the convertible notes, the following table sets forth the number of shares of common stock that would be issued upon conversion of the convertible notes if the conversion price is $11.44, which is the initial conversion price, and also if the conversion price is $9.00 and $7.00 per share. Conversion Price Shares issuable upon conversion(1) Percentage(2) ---------------- ---------------------------------- -------------- $11.44 (the initial conversion price) 441,134 5.8% $9.00 560,731 7.6% $7.00 720,939 9.4% [snip] The shares of common stock included in the table below represent a good faith estimate of the number of shares of common stock that will become issuable upon conversion of the convertible notes. Under the registration rights agreement, we are required to register for resale by the selling shareholder 1,129,568 shares of our common stock. This amount is based upon: . The number of shares convertible from the convertible notes and exercisable with respect to the warrants, and . The increased number of shares issuable with respect to the convertible notes if the conversion price declines.