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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: TAPDOG who wrote (6494)	11/4/1997 11:06:00 PM
From: Dale Baker	Respond to of 9285

You rarely know "who those guys are", that's part of the fun of discounted convertible financing. Take a look at the CDRD thread for a classic story in convertibles. Company with no revenue needs lot of cash and issues convertibles; stock will get whacked if they are converted so it convinces the holders to convert some into long term notes instead. The rest of the discounted convertible is still out there like a grim reaper, so the company tries to convince those holders to move to notes as well. They refuse. Now CDRD is trying for a second time because the biggest discount available kicks in on November 14. Add a Merrill Lynch-supported secondary offering to bring in retail customers and support the price and you get a $21 stock which is worth almost nothing. Sooner or later - sooner if the convertible holders stick it to them next Friday - CDRD stock will tumble. I'm short at an average price of $19. Good luck. P.S. Whoever is looking for "safe shorts" - they don't exist. Sometimes the odds are better than others but be ready for big squeezes before you see any profits. Lots of folks on this thread are shorting for the sake of shorting. Let's be careful out there.