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Gold/Mining/Energy : Altair Nanotechnologies -- Ignore unavailable to you. Want to Upgrade?

To: tracy chelepis who wrote (214)	2/12/1998 5:53:00 PM
From: Rajiv	Read Replies (1) \| Respond to of 603

For those who still do not know the effects of raising money through a floorless convertible issue The effects : ALTIF's SEC filings estimates that the debentures will convert to 359,223 shares approx. The people who buy offerings like these typically short an equivalent # of shares - driving down the price and then cover their shorts at this lower price. If ALTIF remains at the current level - the debenture holders are assured of getting 418060 shares at around $11.96 This will prompt the debenture holders to short an additional 60k shares (420k - 360k = 60k) This supply causes the price to go down further allowing them to short even more shares This can go on and on.... Remember if ALTIF hits $10, the shorts will get 540k shares at $9.2 each - they make the most money if they can drive the stock price down. This approach is perfectly legal and is used a lot. It is relatively easy to do so if the stock in concern, trades with a low average daily volume at prices that are at stratospheric levels with no relationship to the fundamentals. The reasons for going for this approach - The company could not raise the money in the form of pure debt or equity. That shoots a hole in the so-called-analysts' claims of ALTIF being bought out at $50. ALTIF obviously could not convince lenders that they will earn $5/shr from the TN project (as claimed by the garbage put out in the form of analysts' comments). They were forced to go for this approach to raise 4.6 million dollars. All evidence points to the above - large increase in short interest and insider sales. Regards, Rajiv