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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: eabDad who wrote (19465)	5/14/1998 4:32:00 PM
From: eabDad	Respond to of 70976

In thinking about the PERQS a little more... I was a little wrong thinking MSDW would make a profit above $76.14, since the PERQS is covertible to stock (assuming they would have in trust, not new issue). Therefore, they make profit from covering the 6%. Two ways to do that... If they have already accumulated the 3.5 million shares at lower prices, then the price could be set to cover the coupon. Also, there are many options strategies which would generate positive cash flow over time using the AMAT stock as collateral to easily cover the 6% and then some. The key reason MSDW did this was to make AMAT available to a wider class of fund managers. Z