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Technology Stocks : General Magic -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (7130)	10/24/1999 1:36:00 PM
From: John Madarasz	Read Replies (1) \| Respond to of 10081

Bosco...My take is this, The initial conversion price on a series D share is $3.93 The initial conversion price on a series F share is $2.0531 The only way preferred shares can be converted at lower than these prices is by taking the average share price of the ten trading days immediately following the conversion date, provided the price is below $3.93 and $2.05 respectively. My take is this; if I were a convertible shareholder I would want to take an aggressive short position and hold it from the time the convertible shares are issued to me until the price is below my respective conversion price for a D or F share. I would then want to continue to short the stock price down below my conversion price for at least ten days so I could get as low a conversion reset price as possible. Since the average of those ten days would be my new conversion price, I would have no reason to wait to convert and sell into the first signs of strength shortly thereafter unless I anticipated some imminent price appreciation; and if I anticipated imminent price appreciation, I would cover my shares short...potentially driving up the price further. There are three more reset periods into June of 2000, so there could indeed be more shorting to come. It will be up to the strength of company and industry developments as to how much price appreciation will occur, and when. At the very least, D and F convertible shareholders will be getting bargains in my opinion at the current conversion prices. In this particular case here, personally, I don't believe General Magic is in the death throes of a dying stock or company. There are WAY to many fundamental issues that point in a positive direction, all outlined previously. Short shareholders can continue to hold in the face of possible big announcements/ developments that could happen and have been alluded to by the company and industry. They have apx. 4 days to cover as of the NASDAQ short interest posted 9/15/99. There is the possibility of a squeeze... I'd also like to place my disclaimer here , I am extremely bullish on this company and it's stock, and this developing market and industry... and have literally spent hundreds of hours researching same. I respect both sides of the argument both for and against the company here, yet remain strongly bullish. As always, history will be the only fair judge down the road for or against. Please feel free to correct any of my observations if I'm incorrect on the convertible read here, I admit that I am a rank amateur in these matters, and have been diligently trying to understand. Others may feel differently about the company, and the current price of the stock, for completely justifiable reasons. I think that's great and I respect that. Thanks for taking an interest and for the thought provoking post. Best Regards, John Madarasz