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Gold/Mining/Energy : Harken Energy Corporation (HEC) -- Ignore unavailable to you. Want to Upgrade?

To: Gator II who wrote (3218)	7/13/1998 11:58:00 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 5504

Gator, I went back and I believe the following where your two questions: 1. Specifically, how do the shorts profit? 2. Please name one example of a company ruined by the floorless (not by business conditions). While I did not respond to these questions directly to you, I have responded to these (and Ditchdigger has as well) numerous time. I posted a URL to a posts where the floorless profit motive was given in two posts, and I have also given a detailed explanation how a floorless holding the $85 MM European debenture can profit handsomely from hedging as well. To the second question I have answered in two ways, first, I stated that the presence of a floorless is an advance indication of a company's deteriorating ability to borrow or raise money by more traditional means, thus ALL floorless have hidden financial problems, by definition. It is exactly the presence of the floorless feature that raises the red flag (and thus my comment to Roger that shorting floorless is in essence a "gutless" activity exploiting intrinsic or temporary weak financial condition to bring a company down in flames.) Of course, shorters do just that, it is their job to identify overpriced issues and bring these back to reality values, so I cannot complain on Roger's shorting SACM as soon as he found out they issued a floorless. Roger is a very smart shorter (despite the fact that he must be losing a bundle on YHOO and AMZN both of which do not have floorless financial instruments) and he uses whatever information available to increase his odds of success. As I mentioned to him, shorting a floorless is a no brainer and an "unfair" game for a self respecting "short hunter". His response was in essence "do not divulge the secrets of the trade". Second, HAYS had a perfect business going on and its success required additional funds to support growing receivables (as sales multiplied), it went to the CH 11 route due to the floorless, this was the first event that further weakened their balance sheet and price stock so that subsequent offerings could not be made. EXSO was just going to turn a profit before they issued their floorless which was supposed to get them to restructure their debt load. Surprise, from $2 to $.05 in a year or so. As for my motive, I trade only in my SEP account (my non retirement fund are all going into developing the body of "intelectual property" I own, starting up companies based on these patents and developing additional technologies for which the risk is much too high to ask others to invest their hard earned money.) Thus, my motive is certainly is not shorting, since shorting is forbidden iv SEP accounts. If you asked me where is a good point to short HEC I would say either on a break of $4.5 or a rally to $6.5 (which one should expect this week's presentation to analysts should have caused to start, the lack of such a pre-presentation rally comes under an old adage of mine, if the TA and the FA do not jive, believe the TA. Knowing that shorting is not my motive, it is left to you to, maybe, accept the fact that I am an impartial observer (I just turned from bearish to bullish last week on GPGI at $.75 after a year or more of warning my fellow posters to stay away from $2.5 to to $.5, today it is $1.25, another victory for the turnips <G>, not so much in the current advance, but for keeping people out through all the decline) who call it as it is. If you want the benefit of my experience, you may want to take into consideration my advice, you do not have to and if you do you do it at your own perils, since I have been known to be quite wrong and quite often. I do get off threads like this one, where posters become emotional and immature in their responses. I did for two days before, after a newbies felt that the strength of foul language and personal attacks is greater that the strength of rational argument and I will definitely keep this option open. However, one poster sent me a PM asking me to PLUUUSE (?) come back, thus my return. I do not appreciate your questioning my motives either. Finally, as for the YAHOO messages board, it is full with imposters (including some that have used my name and posed as I), I have not and will not post there. I do not have to hide from anyone, I post under my real name and any one that knows how to navigate the net can find exactly who I am. Can you say the same? Zeev