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

To: Zeev Hed who wrote (1333)	11/3/2001 8:57:16 PM
From: Phil(bullrider)	Read Replies (1) \| Respond to of 1438

Zeev, By the way, they have (without the $10 MM) a solid $20 MM or so cash in the bank and their burn rate is about $4 MM per quarter, so their "need" for money may not be that immediate". Why would they pursue this form of liquidity if they don't need it? Just wondering, Phil

To: Zeev Hed who wrote (1333)	11/5/2001 10:43:43 AM
From: BDR	Read Replies (1) \| Respond to of 1438

Zeev, yes, they do not appear to have an immediate need for the cash but, as you indicated in a later post, they may realize they will not be able to raise funds the way most development companies in the pharmaceutical field do it and so they are planning ahead. It has been three years since I looked at the company and I don't see anything that has improved the outlook. Floorless financing (even with some limits) fits this company's profile. Dale

To: Zeev Hed who wrote (1333)	12/19/2001 9:32:35 PM
From: Roger A. Babb	Read Replies (4) \| Respond to of 1438

Zeev, check out the $1 billion Calpine CPN convertible. Not a floorless, but still ugly for shareholders I think. The coversion price is a 23% premium, but the holders have a "put" option on the bonds to get their money back until April or an option to get another $200 million of the convertible. If the share price does not go up enough, they exercise the put. If the share price goes up enough, they exercise the other $200 million. Another scenario is that they short the heck out of it as a hedge. If by some miracle the stock goes up anyway, they convert to cover. More likely they exercise the "put" which will cause a huge liquidity crunch and drive down the share price whereby they make a big profit on the short side. Looks like they can't lose.