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To: Mike M2 who wrote (50838)	3/17/2000 5:39:00 PM
From: Zeev Hed	Respond to of 53903

Mike, it used to be that a company would issue a bunch of shares under Reg S and before you, the investor, knew it, they'll pump the stock and the reg s holders would flip them for a nifty profit, The SEC closed this loop, so the "financial engineers" on the street came up with a new "instrument", we term these the "floorless", these are typically convertible debt or convertible preferred which can convert to common stock, except that the conversion rate is "variable", typically the lesser of a fixed price (ceiling) and a discount (80% of) moving average of the common. The buyers of such debt (aslo known in SI's parlance as "floorless bandits"), engage in shorting the stock, often during the period they are "negotiating" the deal, or slightly after that through a pump, until they have covered a good chunk of their position. Their own shorting has sometimes the power to actually lower the price and then start a death spiral (lower price more dilution, more shorting lower price etc. the gory details are described in detail in the third post on the "floorless thread"). I have not been doing much Don Quixotic bandit fighting in the last six months, too many phone threats and no profits in that activity (VBG). Zeev