Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : LUMM - Lumenon Innovative Lightwave Technology Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Steve Landrum who wrote (1166)	11/21/1999 11:50:00 AM
From: lindend	Read Replies (1) \| Respond to of 2484

I believe you are using the term "floorless convertible" too loosely. See my reply to Richard. You both are correct as these technically are not true floorless agreements. But in reality, what difference is there between conversion at .90 cents and one based on a % of a future market price. At most it is 90 cents. I don't see that this is the case here. What incentive do any warrant holders have to drive the price down? I don't see any. While the conversion prices are low, it appears at first glance that the conversion prices reflect the market price near the time when the agreements were struck. (I haven't verified this, but have been loosely following lumm's action) These are interesting questions, and its good to be involved with a rational discussion on LUMM. What incentive do they have? 1. Lock in profits. Short now, and you have a guaranteed 24.50 per share profit. This is how floorless holders make $$$. Now if you believe that the company is legit and has the financing to pull this through, then yes, the holders wouldn't short here. BUT, this could be said of any floorless. Companies in healthy financial states do NOT execute these type of aggreements and definitely not so many of them. 2. IMHO, LUMM is clearly going to have to massively dillute in order to obtain additional financing. If you had such a tremendous return on your investment, wouldn't you want to lock them in? As far as prices, the last private placement they documented was at .90 cents. The stock price ranged between 4.5 and 10 during that month. At a minimum, a 90% discount.