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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (18646)	7/22/1998 10:19:00 AM
From: orkrious	Read Replies (1) \| Respond to of 25960

Zeev, your analysis doesn't make sense to me. People act in their own self-interest. If they shorted Cymer in the 30's or 40's, or even in the 20's, and it goes to the teens, they have a huge profit, far more than 4%. If they believe that the fundamentals will eventually turn around and the stock will head back up, they are going to cover. Hedged or not, better to take your big profits and cover, rather than settle for 4%. Jay

To: Zeev Hed who wrote (18646)	7/22/1998 10:54:00 AM
From: George Coyne	Read Replies (1) \| Respond to of 25960

Zeev, But do they not stand to lose the large paper profit they have at this point if in fact the price of CYMI runs up sharply? G. W.

To: Zeev Hed who wrote (18646)	7/22/1998 4:18:00 PM
From: Curlton Latts	Read Replies (1) \| Respond to of 25960

Well Zeev I've only been responsible for issuing over $400 million of cnvt. debs. so maybe I missed something. I think we both ought to think it through again though. Your comment >>>>"they sell short against the block, getting back (depending on the shorting point) much more than what they paid for the convert. They leave this position as is, since they have all the money they invested in the convert back" seems to miss the crux of the financial analysis by a wide margin. I don't think even Joseph Jett could have accomplished that feat. Sure they get interest on the short as long as the bank doesn't short change them but that's it. Other than that they've got the full load of capital tied up going nowhere. Every time this stock moves up it takes a bite out of their hide for a full 100% of the upward move. The hedge here is a ceiling hedge only. It was paid for dearly with a penurious coupon. The short interest here is not all just arbitrage either. It's desperate wise guy gamblers. Desperate wise guy gamblers eventually end in an ill fashion generally. Good Luck To Each And All Curly ~~~~~~~~^^ [6.6] .....> [_