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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: doug doan who wrote (12134)	10/30/1997 10:25:00 AM
From: Russian Bear	Respond to of 18263

Doug, I'm no expert, but I see several problems with scenario 1, while scenario 2 would be, almost certainly, illegal. First, how did you arrive at the 5 million share number, for the Cayman Islanders? I thought it would be arround 1 million shares, unless they are still waiting for lower prices, at which to convert (unlikely.) Secondly, while they could certainly move their shares around between cash and margin accounts, and play mind games with the shorts (myself included,) they would need already to have a short position in place before starting. I do not know that they could simply take for granted the ability to establish such a large short position, at will, at the drop of a hat. Even writing deep-in-the-money calls would be problematic on their scale. Lastly, there is some indication (e.g., the reduced short interest for Oct.) that they may have already converted, and unwound whatever position they held. But, like I said, I am no expert on such things. Good luck, RB

To: doug doan who wrote (12134)	10/30/1997 10:54:00 AM
From: CMason	Read Replies (1) \| Respond to of 18263

Doug -- Besides the fact that #2 is probably illegal, as Russian Bear noted above, keep in mind that Management doesn't actually own most of the million or so shares controlled by insiders. As shown in the last proxy statement, more than 80% of those shares are actually unexercised options (see footnote 2 to the shareholdings table). freeedgar.com Unless I missed some subsequent filings, ZITL management hasn't exercised any meaningful amount of options since the proxy. This lack of management willingness to put their money into the shares was one of the factors that led me to view ZITL as a good short. Good luck, CMason