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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (3518)	7/28/1998 10:43:00 PM
From: I. N. Vester	Respond to of 27311

re: variable prefered short arb play I think we have to see the complete details on the preferred. Note that the release states: 'If the company meets a certain milestone, the Series A will be convertible at a variable price after 12 months from issuance'. So i don't think they could arbitrage now - they can't convert for 12 months. I know there are some real risks associated with variable prefered stock rights, but i believe that Lev et. al. are in a strong enough position to avoid setting themselves up for a situation where Castle Creek can drive the price down to line their pockets at the expense of the shareholders. Tho i am no expert.

To: kolo55 who wrote (3518)	7/29/1998 8:48:00 AM
From: John Curtis	Read Replies (1) \| Respond to of 27311

Paul: "Arbitrage?" Yep, that's a concern too but consider this one statement. "If the Company meets a certain milestone, the Series A Convertible Preferred Stock wil be convertible at a variable price AFTER TWELVE MONTHS FROM ISSUANCE." So me think's you don't need to worry too much about it, eh? Unless I've misinterpreted the meaning of that statement. But I'd looove to know what that "certain milestone" is. Still, I caution be careful of the classic "bull trap." If your in already then enjoy today, it's gonna be fun(but don't go out on margin, at least, not yet!!). If you're on the sidelines thinking, "Holy Jeezus! They got it, let me in!" I council one to pick their moment, don't chase, let the euphoria fade a little first(today's action should give you a feel for what the Street thinks now). Bull trap's can getcha if you're not careful. So keep your "hand" strong(no margin, etc.) to guard against any variation of your aforementioned arbitrage gambit. MM's are not above playing games, after all! Regards! John~