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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: xcr600 who wrote (25709)	3/24/2000 6:19:00 AM
From: Clint E.	Read Replies (1) \| Respond to of 68381

Good morning, X. >>> Do you think the note buyers short the stock down to their "entry" price? Seems logical to me as it gaurantees them an immediate profit. Any thoughts? Not the note buyers who are referred to as Qualified Investment Buyers(QIB). They're not technically in the picture yet when the news is announced. As I implied in my previous post, the investment bankers(GS, MWD, MER,...) who in most cases are also the market makers in the stock, act as brokers looking to find buyers. This is the way I look at it. If you ever bought or sold a house thru a real-estate broker, you know that his/her first priority is to make the deal go thru. To do so, on one side he/she needs to make the property look attractive to the buyer and on the other side he/she tries to adjust or scale down seller's expectations. The same thing happens when a company issues warrants or secondary offering. The investment bankers soften the market for the stock since under one option, the note buyers can convert to stock, at higher price. Before the news is announced, other MMs see how the stock's primary investment banker is dumping shares and softening the market so they follow the trend. They sometimes make a few phone calls and learn about the tomorrow's news, before you and I. The rest is in the chart! You can read more about the converts at: convertbond.com Clint