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To: Jesse Livermore who wrote (1772)	11/19/1997 11:14:00 PM
From: Mike	Respond to of 3307

Jesse, I'm a bit confused after reading the s-3/a, but as I understand it there is an incentive to keep the stock price low at least until March '98. (Maybe longer) The number of shares which the Preferred stock holders recieve will be based on the stock price between now and March '98. The Reg S reads... >Each share of Series C Preferred Stock is convertible into the number >of shares of Common Stock equal to the quotient of (i) $1000.00 >divided by (ii) the Conversion Price. Up until March 1, 1998, the >Conversion Price will be $5.00. Thereafter, subject to the maximum >Conversion Price specified below, the Conversion Price will be equal >to 101% of the average of the three lowest daily trading prices for >the 22 consecutive trading days immediately preceding the date of >conversion. ( ie. 1000/$2 = 500 shares ; 1000/$5=200 shares) The Reg S continues... >The maximum Conversion Price is $5.125 until March 31, 1999, and >thereafter will be the lesser of (i) $5.125, (ii) 101% of the average >daily low trade prices of the Common Stock for all trading days in >March 1999, (iii) 101% of the average daily low trade prices of the >Common Stock for all trading days in September 1999 and (iv) 101% of >the average daily low trade prices of the Common Stock for all >trading days in March 2000. So, the preferred shareholders are guaranteed a conversion price of $5.125 (or 195.12 shares of common stock for each share of preferred stock they own. 1000/5.125). But as you can see sections 2, 3, and 4 of the above give them the lesser (the lower the conversion price the better) of the average trading prices in March '99, Sept '99 and March 2000. After reading this reg it sounds as if there are no shorts at work here. Rather, an organized effort to suppress the stock price. That would explain why we saw 10's of thousands of shares trading at the ask last week when earning the earnings report came out. Yet, no movement in the price. Buying all I can at these levels, Mike

To: Jesse Livermore who wrote (1772)	11/20/1997 1:50:00 AM
From: Jerry Whlan	Read Replies (1) \| Respond to of 3307

So, maybe we are seeing selling to keep the price artificially low? Except, if they can't short under 5, where are they getting the stock to sell now? Strange but true: It is legal to short a stock under $5 if your broker is in Canda, the NASD rules don't apply, even though they are working with US securities. Additionally, it is possible for the "big boys" to put up collateral like restricted shares to short through other means, similar to how Reg S shorters gut a company. I don't know how feasible it is to short against shares that are restricted for 6 months or more.