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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Jibacoa who wrote (25213)	5/26/2001 12:47:30 AM
From: Ken W	Read Replies (2) \| Respond to of 29382

Bernard RSTO: As Sergio has explained. The reduction of convertible debt lowers the arbitrage (short) level of the stock causing the stock to move to the upside in line with the reduction (percentage wise) of that arb. Now, on the flip side. Companies taking on new convertible debt invite the arb's to short their stock to hedge their convertible position. The cycle begins when the restricted shares come to market (just the same as when debt is taken off the table) This is one of the reasons for my short position in RSTO. The company has taken on two private convertible finance deals in a very short period of time. Secondly, they are in the business of up scale home furnishings. Yuppies are losing their jobs like hot cakes...No more fancy chairs for them. Third, the company just reported a .50 loss per share vs .25 same Q last year and have no future view of earnings due to the economic slow down. Also they are closing stores. Lastly!!! The chart has a huge gap to fill nearly 50% down from the present level and has just recently hit a 52 week high.. stockcharts.com[l,a]daolyimy[dd][pb50!b200!d20!c10][vc60][iUb14!La12,26,9!Lp14,3,3!Lc20] Have a great weekend everyone. Ken