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Non-Tech : Cityscape Financial (CTYS) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (2453)	5/18/1998 12:35:00 AM
From: Ploni	Respond to of 2544

This article suggested that in some cases the manipulation could be illegal? I wonder how that's determined? All short-sellers want to see the price of the stock go down, but most (like when I short a stock) hope it will drop through a recognition of overvaluation. Perhaps it becomes manipulation when the drop in price is instead caused by the very act of dumping a huge quantity of (short-sold) shares in a short period of time. I sure don't know who shorted millions of shares of CTYS in October, but I imagine that the SEC could determine that. I do hope they launch a criminal investigation against the short-sellers -- and also against CTYS management, to see if any of their omission of material information borders on the criminal. * * * Zeev, let me ask you an unrelated question: how about people who hype stocks in newsletters, causing stocks such as KTEL to soar? That seems like blatant manipulation, but don't the big brokerage houses also do the same thing? Is the distinction that the brokerage houses do research into the underlying company, whereas the pump-and-dump operations only research is looking for stocks with very thin floats? How do you determine what's o.k., and what's not, regarding such communication with the public?

To: Zeev Hed who wrote (2453)	5/24/1998 5:49:00 PM
From: CoffeePot	Read Replies (2) \| Respond to of 2544

Hi Zeev, I've been monitoring this thread for awhile and to say the least it's been interesting. Though I must say I have been quite perplexed by the emphasis on the convertible debt and lack of attention to Cityscape's underlying fundamentals--the growth and health of their loan portfolio. I may not have my numbers right but if I remember correctly 50mm of convertible debt isn't going to determine whether a company with $3billion+ in assets is going to sink or swim. Even if CTYS had $0 convertible debt outstanding it's likely the stock price would have followed the same path. That said, from looking at CTYS's U.S. loan portfolio appears they should be in fair shape. If I remember correctly the default rate on their U.S. originated loans is around 3-4% compared to 17-18% for their old UK operations. I'm not sure at what point the default rate becomes dangerous but 3-4% seems to be about equal with other firms in the industry. What really seems to be hurting them now is their high borrowing costs. I'm not sure if they've been able to float anymore bonds but if I recall correctly their last one carried a 11% interest rate (which in and of itself scared off some observant investors, I think we were at around $8-9 at the time) which is obviousely way way higher than their peers. I feel if CTYS can renegotiate their debt and bring their cost of borrowing down to a reasonable level this could be a very viable operation.