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

To: Robert T. Quasius who wrote (11206)	1/13/1998 5:36:00 PM
From: Bald Eagle	Read Replies (1) \| Respond to of 12298

<<Long term, this stock WILL recover, but only after 2-3 quarters. >> I think you're being extremely optimistic, it will take longer than that to see any move back to close to the highs of last year. More like 3 years plus, IF they don't go bust before then or get bought. BTW, I'm long, so I hope you're right, but realistically, I think my APM is dead money for a long time except for selling covered calls.

To: Robert T. Quasius who wrote (11206)	1/13/1998 6:39:00 PM
From: Jonathan Bird	Read Replies (2) \| Respond to of 12298

One interesting note: the fully diluted shares is equal to the undiluted, which to me says that all of the convertibles have been converted. Any short interest that's out there now is "naked" short interest that may scurry to cover when the earnings start to improve. We know the debentitures have not been converted or else there would be 30 mil shares outstanding right now. We know the debs have not been repaid because the 115 mil dol debt is still on the ballance sheet. So what happened? I can concieve of only two posibilities. 1) There is some sort of accounting rule that says you don't count as dulutive debs that in all likelyhood will never be converted. Or in other words, the stock price is not expected to reach above 18.6 before year 2006. 2) The deb holders have told APM that they forfeit their right of conversion for some reason. Im not sure why they would do this. But if they did, it would be because they don't believe the stock will be above 18.6 before year 2006. But I still sont understand why they would do it. 3) Simply because if the debs were to come due on the date of the ballance sheet they would not be converted because the stock price is below 18.6. Most likely 3, then 1, then 2. But none of it is in accordance with how I understand the accounting of debs is done. I will try and figure it out. Jon Bird