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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Joe King who wrote (2190)	1/5/1998 8:55:00 PM
From: steve goldman	Respond to of 4969

Generally speaking, smaller, less liquid companies will issue secondaries offshore because foreign countries have less stringent standards regarding securities in their country. They don't have to file and meet the standards of the SEC's regualtions. As well, buyers of these shares know the position these companies find themselves in, having to sell shares abroad. Thus the selling price is usually 20%, roughly below the current us price. Nonetheless, if a buyer knows that they are getting shares at a certain price, they might immediately sell shares short in the US at the higher prices, and then simply cover their short position for a profit. For the most part, this is how I have seen such investors profit. In the end, from my experience, which I must say is pretty limited in this area, the transaction for the investor getting the shares is a layup since they can possibly sell the shares short in the US as soon as the know that they will get shares later down the line at a discount to the current pricing. Generally speaking, the practice is also a bit deceptive since it ultimately is to the detriment of current shareholdesr who become diluted with shares coming into the marketplace at lower prices wihtou the same level of scrutiny as to the use of the proceeds, etc. Generally speaking, its no good. A great site, www.edgar-online.com, has definitions for sec corporate filings....take a look at it. Sec Filing Definitions: edgar-online.com I hope this helps. Regards, Steve@yamner.com