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.

Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Dave Kahn who wrote (11436)	2/3/2000 10:22:00 PM
From: Sly_	Read Replies (1) \| Respond to of 13953

Found this on RB...... Any Comments? CONVERTIBLE TERMS... posted earlier.. these are ruff approximation in terms of the numbers: 500 million convertible @ 18% premium to face value, 1000 face x 1.18 = 1180 (redemption value) conversion price, 24 on the low end number of shares per 1000 face = 49.2 (1180/24) total number of shares = 49.2 x 500000 = 24,600,000 what COULD this mean. if this was what is called a bot deal the underwirter assumes all responsiblity for the issue. they effective have agreed to buy the issue and then distribute to the street. That means the firm is net long 24 million shares of EGRP. No firm wants to take that kind of risk for a number of reasons: 1. stock tanks they're holding a worthless convertible that no one wants to buy. 2. stock tanks issue is impossible to sell 3. no firm wants to be net long that many shares of one company to manage risk, they short approximately that many shares to hedge their risk. result: -deal is done, they collect the underwriting fee, -they unwind or have been unwinding there short position corresponds to the number of short shares on EGRP approx.28mill if any of you watch the markets close enough and long enough and follow enough stocks you can see this type of activity happen before, during and after a secondary offering or private placement. the stock may or may not rally more, but this info is offered to the board to provide another picture of what COULD be happening behind the scenes...the industry is still "hated" unfortunately ### Sly