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To: NOW who wrote (192383)	9/17/2002 1:40:06 PM
From: reaper	Read Replies (1) \| Respond to of 436258

not sure. IF they can get the money raised then the liquidity problem is solved (on an intermediate, 2-4 year basis). the problem is how do they raise $500mm. with the stock at $10 they'd have to sell 50mm shares, which is a lot of dilution. but imagine if it went to $5. then they'd have to sell 100mm. what if it went to $1? 500mm shares. i'm not really sure where this set of equations solves. i actually have a feeling it has multiple equalibria -- i.e. the lower the stock goes the lower it goes, and vice versa (i.e. unstable system). i'm gonna think on it tonite, but right now i'm inclined to cover half tomorrow, and wait for the deal on the rest. once they get the equity deal done i'm gone. part of why i don't want to wait around is that there are other sub-prime lenders still left to re-deploy capital to out there (a specific one in the mortgage business comes to mind <g>) Cheers

To: NOW who wrote (192383)	9/18/2002 9:27:02 AM
From: reaper	Read Replies (1) \| Respond to of 436258

Tooearly -- since i didn't really finish my answer yesterday Message 18000895 i thought on it some more last night. basically, what ACF has become is an insane beta bet on the market. IF the stock falls, then they need to sell more and more stock to solve their liquidity problem, which will drive it down further. IF on the other hand there is a short-covering rally, then they need to sell less and less. so basically, if you are looking for something that will be dis-proportionately down on a bad down day (or over a bad down series of days) then ACF is your man. IF you really hate the market, you should be doubling down on your ACF short rather than covering. i personally do not need that kind of beta at this point, so i will be covering half of my position at the open this AM, presuming it opens in the low $8 area, and letting the rest ride. Cheers