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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Allan F who wrote (916)	3/11/1998 3:38:00 AM
From: Q.	Respond to of 2506

Allan, an S-3/a is only required when the SEC doesn't deem the S-3 effective as it is. Sometimes it does, more often it sends back 'comments' instead, which means the co. has to file an S-3/a. The only way for you to find out in the case of a particular company, TERA in your case, is to phone the co. and ask to speak to either the CFO or the corporate counsel. They are always forthcoming with this info., so don't be timid. Here's your script: 'My name is Joe Blow. I'm an investor. Can you tell me if the SEC has deemed the registration effective, for the S-3 you filed in January?' If the answer is no, ask 'Has the SEC sent you comments, so that you will have to file an S-3/a?' While you're at it, you can ask 'Have there been any conversions yet.?' You can find the phone no., and usually the name of the CFO, quite easily online, in the S-3 itself, among other places. I took a quick look at TERA. There are two offshore sellers, and one of them, Genesee Funds, is well-known for doing these discounted convert deals. (In fact they were in the news a while back when they were sued (or something) by the SEC for selling shares short before conversions -- while Genesee didn't admit anywrongdoing, I think they agreed to stop doing that.) The number of shares being registered is less than a million, which is less than 10% of shares outstanding, so that is a factor that makes this discounted convert look a little less appealing than some. On the other hand, there may be other factors that make it more appealing. I only gave it a quick look, so I'm sure I missed a lot.