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Technology Stocks : Noise Cancellation Technology (NCTI) -- Ignore unavailable to you. Want to Upgrade?

To: Dan S. who wrote (2217)	7/21/1998 2:58:00 PM
From: TA2K	Read Replies (1) \| Respond to of 2775

A few words on the Preferred Stock conversion situation.... Conversions take place exactly because the share price is low, because generally there is a formula that yields more common shares per dollar of preferred shares the lower share price drops. For instance, suppose you have a preferred share with $1 value. If you convert it when common share is at $.50, you would get 2 common shares in exchange. If you convert it when the common share is at $.25, you would get 4 common shares in exchange for that one preferred share. So it makes sense for the preferred share holders to wait and convert when the common share price is at its very lowest -- and during such a time, most unfortunately, it is the exact worst time from the standpoint of common shareholders for these bunches of new common stock ("Icebergs") to be entering the market, with the added supply driving price down even further, and, thus, encouraging another round of conversions!!! It is a horrible, horrible cycle for the stock to be caught in, an absolute nightmare scenario (of course the bastard shorters are completely ecstatic and gleeful at such a prospect). Unfortunately, there appears to be no way of knowing what the "Iceberg Field" is like out there. I suspect that potential buyers of NCTI would like to see several days of minimal trading volume -- they will use that as a proxy for an assessment of conversion activities, taking low trading volume to indicate that there aren't any more immediate conversions taking place. For a number of positive reasons (read over this thread) I feel that there will be plenty of market demand for NCTI, and the price will again rise. But it is not rising right now overwhelmingly because of the damn share conversion activity. Once the market is convinced that conversion activity is over with (assuming that not tooooo many new shares are added), I would expect a very quick increase in share price. With the above said, it is encouraging to see the converted shares rapidly absorbed at the current price level, instead of seeing price drop. It shows that there is indeed real demand for NCTI, and buyers want to take advantage of the bargain prices now, fearing that they won't long have this opportunity. And if a significant positive news item from NCTi hits the wires, which could happen any day, there will be a rapid rise, regardless of conversion activities. I (for one) am hoping.... Nicholas