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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (59751)	9/29/2000 7:25:32 PM
From: Sword	Respond to of 122087

"Assume MSFT trades at $5, then the $70 net settlement value demands the delivery of about 14 times the stocks puttable... that translates into 2382MM (newly issued) shares..." Not that it is likely to trade that low (although $25 isn't out of the question), but given this scenario, they would have to go to shareholders for permission to issue 1 billion new shares since they only have 1.4 billion in the outstanding that remain to be issued. Instead, I suspect that they would just begin to buy the stock to close the warrants close to expiration using some of their cash hoard. I don't know of any company that has ever gotten itself into this kind of a situation. It's kind of interesting. -Sword

To: RockyBalboa who wrote (59751)	9/29/2000 7:41:51 PM
From: Sword	Respond to of 122087

If MSFT were to experience a pullback to the same trailing P/E as AAPL, it would be trading at $21. I doubt that would happen, but then again, this market is taking no prisoners.

To: RockyBalboa who wrote (59751)	9/30/2000 7:39:48 AM
From: Fundamentls	Read Replies (1) \| Respond to of 122087

Hmmm....sounds a little bit like floorless convertibles, doesn't it? The more the stock price tanks, the costlier it gets. Unlike convertibles MSFT has the option to settle in cash, which would in effect be the same as a buyback, but that doesn't make it any less expensive a gaffe. Could MSFT really have been so arrogant as to think its stock price could never go down significantly? Or is there some other explanation we are missing? Regards, Fund