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Non-Tech : Littlefield Corporation (LTFD) -- Ignore unavailable to you. Want to Upgrade?

To: Gary K. Best who wrote (5792)	12/21/1997 4:50:00 PM
From: SE	Respond to of 10368

I think the "artificial support" comes from the fundamentals of the company. Meaning, as the stock approaches $5, it is very hard to short the stock and drive the price down in order to buy warrants at a lower price. This means the shorters are not selling. Further, as the price approaches $5 any discrepency in spread for the arbs is harder to come by. Therefore as the stock approaches $5 the activity slows down from the shorters and that arbs and the price either stands pat or goes up a bit at which point they can play games again. So the support comes from those of us buying the stock on the cheap because we know this stock should be valued at more than $5. That is my guess. The company is not buying so they are not supporting the stock. Let's think about something else. Arbs...Short the stock at $6 and buy the warrant simultaneously at $7/8. Automatically locked in 1/8 profit. However, if the stock goes below $5 they would not convert the warrant, but would instead buy shares on the open market to convert and that therefore would drive the stock up above $5 as they are buying already existing supply rather than covering with shares issued by the company upon conversion. This in and of itself will provide support at the $5 level. If they drive it below $5, it will immediately rebound as if I can cover my short at 4 7/8 and let my warrant expire, I would do so as I just made another 1/8 of a point. In fact, the more I think about it, this is the strong support at $5 right now through the end of the call. Any attempt at putting this stock below $5 will be met with lots of buying, of course, only through the end of the warrant call. GO PACK GO! -Scott