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Strategies & Market Trends : The Amateur Traders Corner -- Ignore unavailable to you. Want to Upgrade?

To: Irish who wrote (3358)	11/16/2000 6:20:04 PM
From: Rutgers	Read Replies (2) \| Respond to of 19633

Irish, P6's CEO has a margin call... biz.yahoo.com Does the PSIX announcement after close ..regarding margin call on Shrader's.. shares.bother you in regard to future action?? Yes, this bothers me, the stock is now down in AH, but it doesn't bother me longer term. The reason I am bothered by this announcement is solely due to the timing of it. Why now? Why make this announcement only a few hours after the GS news? This is like a Soap Opera. I'd love to read the terms of the loan documents. Would also like to know when the margin call was initially triggered. The stock hit a low of less than $1.50/sh on November 9th - a week ago. Was the CEO offered an opportunity to satisfy the call? OTOH, a good question may be why wouldn't he satisfy the call if he believed that the shares would appreciate in the near term? In any event, the timing of this PR regarding the call was purposeful. Unfortunately, there are way too many missing pieces to this puzzle. Remember, the stock closed up today -so, certainly the close would not have triggered the call. Pure speculation, but if the lender thought the stock might be worth in the future, then wouldn't they need to sell the stock thus terminating Schrader's equity position and allowing them to purchase those shares for their own account? In other words, if they didn't make the "call" today, than any appreciation in the shares would be for Schrader's benefit, not theirs. OTOH, banks have certain fiduciary obligations and I don't know if they could try to pull off a deal like this. Like I said, I don't know the terms of the deal, but this appears to me to be a side-event in terms of the potential sale of the company ... Only time will tell, but the one thing I know, is that P6 has significant assets (yes significant debt as well) that others want and GS was brought in to maximize the premium for the deal(s). Bottom line: anything less than $2 looks like a gift to me. Should be interesting reading if Barron's does a follow-up story this weekend. BWDIK