Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper -- Ignore unavailable to you. Want to Upgrade?

To: H-Man who wrote (2667)	6/6/1998 8:51:00 AM
From: Dave Bissett	Respond to of 4142

The problem with extending the conversion is what Crossy said earlier...the value of the P's is related to their conversion value, period. Take that away and who'll want to buy them? What's left that is. According to Gary this board controls the vast majority of them. I told a friend about the trilogy who's much more experienced than me and her immediate reply was "I don't know why you'd want the P's because commons always appreciate more"...then I told her about the conversion and she said "OH, THAT'S DIFFERENT". OTOH, if they convert en mass come October I'd expect some selling of the resulting commons but how severe is anyone's guess. Remember how much the board controls? And if Arcon is well on their way by then nobody in their right mind would unload a LOT of their common holdings, so the selloff might be minor, and in any case shortlived. As for the P conversion setting up arbitrage, I don't understand that so can't figure that into the pros/cons. Personally, I'd like to have at least the OPPORTUNITY to realize profit from the conversion of P's somewhat sooner than later and if that opportunity is extended more or less indefinitely I'd be buying W's instead of P's. Now if institutional buyers would move in big on the P's that's another story...it might make them valuable in their own right, i.e. keep up in value with the commons, but who knows if/when that will happen? Before we can expect anything from institutions I'd think MIDL will have to get listed, and that means producing! DB DB

To: H-Man who wrote (2667)	6/6/1998 12:10:00 PM
From: Ga Bard	Read Replies (3) \| Respond to of 4142

Ok H ... Here is my orignal thought on the P conversion and why... The P gets shareholders voting rights for the long term investors. They are entitled to dividends and so forth in the future. As I am learning more and more about arbitrage I am discovering that the one thing you do want to set up in a stock is arbitrage. This is why a lot of P never converts. Now if the common should happen to go above the warrants then arbitrage will happen. Another words the warrants will be exercised and the common sold for no risk profit. Also no shares are held. This is a day traders dream I grant you. This is why I am steadily working on how we can if we hte P shareholders do convert and not set up arbitrage. Now this is being a problem with the P right now at an AMSC of .46 and the common at .75 there is a .30 gain instantly (No risk arbitrage) should the P be optional conversion. Instead if we make the P conversion to Oct 1999 anyone short on the P will have to pay the interest on their short position and any dividends are adding to the short position. Another words extending the P conversion mails those we hate most ... day traders. arbitraguers, shorters. I would agree to optional conversion only if the P is higher than the common say 25%. Heck there is no way anyone would sell the common for a loss. Just remember there are those that love to make "no risk" trades. That is why I am some talked me into the optional from my orginal stand or just extending every year. Liquidity can be done because there is a market on the P. Eventually they are going to get a JV and so forth and the P will attract long term investors which will definitely hit the P without a doubt because it is so dang low. However they are advoctes who want full value and optional they think will get the P realized value. Well that I doubt because of arbitrage. People that do not consider the dynamics of shorters and day traders typically get nailed. Hey I could be wrong but that is story and I am sticking to hit. 1.) Extend the P conversion to Oct 1999. 2.) No Optional unless the value of the P exceeds the common. GB