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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: Parker Benchley who wrote (4711)	4/9/1998 12:40:00 PM
From: george eberting	Read Replies (1) \| Respond to of 19331

Bear with me on this one. I want to get a better handle on things and get some ideas confirmed or denied. 1. Former CC Canada people received 7,000,000 options to buy DCI shares at $.20 each. These options were/are exerciseable on a staggered bases until the year 2001. 2. Many of those options have been exercised, and the shares received have apparently been sold off, to a large degree. 3. Holders of unexercised options have apparently been selling short, expecting to cover when they finally do exercise their options and get their shares. 4. Joe has made it very clear that he is going to sell the company, quite possibly by the end of the year. But some options are not exerciseable until after that time. 5. Since a significant part(?) of the compensation the CC people received was options, what is their position vis a vis the as yet unexercised, future options? If the Company is sold before the options can be exercised, where does that leave them? 6. For those CC people who have gone short in anticipation of covering later by exercising their options, what happens to them if the company is sold before they can receive their shares and cover? I presume the deal with them covers the possibility that the company could be sold before all the options were to be exercised? If it doesn't, then that might get a little sticky (as in lawsuits don't cha know). If I were a holder of a bunch of options like the CC folks, under what circumstances would I be so highly motivated to want to sell short these past three months? Do they believe that they will be able to do something with those options even after the Company is sold? Or do they believe they will not? Right now I'm inclined to think they believe their options are exerciseable, no matter what. So they have no fear of consequences of selling short now. By selling at about $1.30 more than their $.20 cost, they lock in their profit. If the stock goes up, they believe they will be able to cover when they get their shares. If the stock goes down, they can still cover if they want too, or maybe buy lower priced shares to cover, and just hold on to their newly received shares. Somewhere in all this is a totally logical explanation for what has been driving those folks to sell. I'm not a believer that there is anything sinister about it. They are simply doing what you and I would do if we were in the same position. But exactly WHAT IS THEIR POSITION RELATIVE TO THOSE OPTIONS IN THE FUTURE? Is it a satisfactory strategy for the longs to simply hold on until the end? Or is there a counter-strategy we should be employing to work against the CC shorters to our advantage? Any help on this would be GREATLY appreciated. George E.