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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (1437)	4/3/1998 10:38:00 PM
From: Mayer Tchelebon	Read Replies (2) \| Respond to of 22640

Now we know what to expect whenever Telebras will announce that it WILL be disbanding in 30 days. Perhaps we should think about a strategy to pursue when that happens. Do we buy it after the subsequent drop and live through the conversion? it might be worth it, especially if we know that all 12 companies will be listed as ADRs. One word of caution: now you can buy TBR with 70% margin, but the new companies (or some of them) will probably allow only 50% at first; I don't think they will be all option-eligible from day one. As a result, the reduced leverage will become un-attractive to some. Out of the 12 companies, it appears that 4-5 will account for 80% of the total value, therefore some of the smaller companies might be $1-3 stocks. Will they be marginable? if not, they will be sold big time and then become bargains. Food for thought.