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To: Tom Simpson who wrote (11951)	5/16/1998 9:32:00 PM
From: Zeev Hed	Respond to of 12298

Actually, their is a "rent" charge for borrowing stock to short, the dividend, except in this case, I do not think the shorters have to worry for quite some time. Institutions that lend stock out to shorter do get a small fee I believe, I am not sure where it shows on the shorters account, however. It could even be in the form of additional discounts on their own trading. Zeev

To: Tom Simpson who wrote (11951)	5/16/1998 10:00:00 PM
From: Frodo Baxter	Respond to of 12298

>What irritates the hell out of me in this case is that I didn't get a shot at buying the damn things. Well, they've been registered, so I don't see what you're complaining about. Oh, you mean you wanted to buy them at the offering? Hehe. Become an institution. >In a lot of ways they look more like a form of common stock with preferences....namely a 6% dividend and full participation on the upside. Stock with coupon... bond with upside... same thing. To tell you the truth, low double-digit returns don't get me too excited. You can construct more or less these same risk profiles with derivative instruments. p.s. I hear the APM converts are pretty cheap...

To: Tom Simpson who wrote (11951)	5/20/1998 3:10:00 AM
From: Frodo Baxter	Read Replies (1) \| Respond to of 12298

Tom, if you're interested in arbitrage, there's an article on the DaimlerChrysler merger in today's WSJ. The article is right that the exchange formula is a complete bitch to work with. (Daimler is distributing 20DM/share in a special dividend for tax reasons and then raising an equivalent amount) On the other hand, the article exaggerates the difficulty in arbing it. My calculations yield ~12% gain in a few months. Despite all this, I have an unhedged position in C, on the notion that while Daimler or the DM may fall, there is an equal chance they may rise.