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

To: Perspective who wrote (1238)	10/2/2000 12:54:36 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 1438

Since it gives the maximum number of shares into which this is convertible (about 3.5 MM shares), the floor is set at about $10.5/ shares. This is not a "death spiral situation, but it surely put a ceiling on the stock, I would say the ceiling could be at about 30% of the conversion ceiling ($18.00) or about $22/$23. Of course, if SCON starts and ship some quantities, (and the convert holders know about this inadvance, as they probably will), then they will no longer have that incentive to short. The fact that the conversion ratio does not change for nine months indicates that this is relatively "patient" money that is going to use shorting only as a true hedge in the event that they see the stock faltering. They may start and short anytime the stock is about $18 (even before the nine months period expired), and probably will short rallies. Such rallies might even be engineered during the first nine months period. Zeev