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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU) -- Ignore unavailable to you. Want to Upgrade?

To: BlackStar who wrote (4047)	3/17/1998 11:40:00 AM
From: Jon Tara	Read Replies (2) \| Respond to of 18444

If they are Reg S, then the "grand plan" is "screw the existing shareholders by selling discounted shares overseas". This is almost never advantageous to existing shareholders. Debentures are placed overseas which are convertable into common at a floating discount to the market price of the common. In other words, the overseas "investors" are GUARANTEED a profit - typically 20-30% - the minute they convert their debentures to common. Oh, there are restrictions on selling them immediately, but, somehow, they almost always seem to get around them one way or another. (The most common way is by shorting - even though there is usually a restriction against shorting. And don't believe that NETZ can't be shorted - it certainly can - the MMs can short anything, anytime.) Reg S is just plain abusive, and the SEC is putting further restrictions on it. (Now going to a one-year holding period.) What they SHOULD do is just eliminate it, though, as past efforts to regulate it have been as ineffective as this latest one will be. You'd better hope that the placements are anything but Reg S. It's the kiss of death. Ask yourself this question: would you buy more shares at the current price? I suspect that the answer, for many of you, is "yes". Well, if so, why aren't they making a conventional offering in the U.S.? There are two possible answers to that: a. there aren't enough people who agree with you or b. they can't enrich their friends with a conventional offering. My apologies is this is NOT to be a Reg S offering. However, I wasn't the one that just brought it up, I'm just responding to another post. It would behoove everyone here to find out pronto if this is to be a Reg S offering, and, if so, to quickly learn about them. Note also that Reg S offerings don't have to be abusive, but almost always are. The most common form right now are convertable debentures that have a floating conversion rate at a percentage below the market for the common. These are guaranteed losers. While it's possible to issue Reg S shares, rather than debentures, and to use a fixed conversion rate, it's almost never done, as it doesn't provide the riskless profits to the sellers overseas buddies that these floating-rate convertable debentures do. I'd suggest you all take a look around here on SI and see what happened to other companies that have done Reg S placements. Just do a message body search search for "Reg S". Wake me when you find a happy story. - Rip Van Winkle