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Technology Stocks : Applied Magnetics Corp -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (11054)	12/17/1997 2:41:00 PM
From: Don Earl	Respond to of 12298

Hi Lawrence, <You're assuming they converted the borrowed ringgit into dollars.> Or spent it. < They didn't.> From Q3 10Q: <SHORT-TERM BORROWINGS At June 28, 1997, the Company had outstanding approximately $50.2 million of short-term borrowings in floating rate demand loan facilities from banks in Malaysia, where it has substantial manufacturing operations. The facilities are callable on demand, have no termination date and are guaranteed by the Company. The loan facilities are used in the construction and expansion of assembly facilities in California, Malaysia and the Philippines and for working capital purposes. While the Company has no reason to believe the loan facilities will be called, there is no assurance that the banks will continue to make this credit available.> ______________________________________________________________________ They did. Even if they put the ringgits in the bank and used them to pay off the loan there would be no loss involved. The only way they could loose money on the deal would be if they put the ringgits in the bank sat on it for 6 months, converted to US currency, and then had the value of ringgits go up. It's a short play. Borrow high. Cover low. Regards, Don