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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (1200)	7/3/2000 10:37:55 AM
From: Razorbak	Read Replies (1) \| Respond to of 1438

"Shop At Home (SATH) Completes $20 Mln Private Placement" Monday July 3, 10:14 am Eastern Time NEW YORK, July 3 (Reuters) - Shopping service Shop At Home Inc. (NasdaqNM:SATH - news) on Monday completed a private placement of $20 million in convertible preferred stock and warrants with a group of investors led by Promethean Asset Management. Shop At Home Chief Executive Kent Lillie said in a statement the company has ``numerous strategic opportunities in development'' that will benefit from this financing. The Nashville, Tenn.-based company said proceeds from the transaction will be used as working capital, for acquisitions of additional television stations, expansion of cable and satellite distribution and other general corporate needs. The preferred stock will be convertible to Shop At Home common stock beginning six months from the closing date. Conversion rates will increase monthly to a maximum of 88 percent of the lowest closing bid price of the company's common stock for the four days prior to conversion, the company said. The conversion price, however, will never exceed $12 per share, the company said. The warrants allow investors to buy two million shares of common stock at a price of $5 per share, which if exercised would generate additional proceeds of $10 million to the Nashville, Tenn.-based company. Shop At Home sells speciality consumer products, primarily collectibles, via the Internet as well as over broadcast, cable and satellite television networks. Shares of Shop At Home were up 17/32 at 4-15/16 on the Nasdaq stock market. biz.yahoo.com

To: Zeev Hed who wrote (1200)	7/6/2000 1:22:57 AM
From: Puck	Respond to of 1438

Cramer clearly doesn't know what he's talking about, for he fails to mention the key of the floorless excercise (as Zeev has demonstrated): the convertible bond collateralizes the short position. Cramer thinks the short is covered by regular market purchases if the stock prices crashes. He couldn't be wronger. It is unfortunate that his writings are not as enlightening as they could be, given his readership, and may serve to create an unwarranted general fear of completely healthy and useful convertible bonds. After reading his article, a naive CFO still wouldn't know the difference between the two.