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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: drjoedoom who wrote (24)	8/7/1998 12:38:00 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 1438

drdoom. I'll respond to one or two of your points. time is too short to handle all of them: "Now you have softened the argument, suggesting that the seller is merely an informed insider. Can you give me some specific examples of a BOARD MEMBER shorting shares against a floorless position. Such insider transactions would, of course, be disclosed in SEC filings." The bandit does not have to be an "insider" to know better than you and I what is happening. He has million in the deals and assign a person to monitor the situation better than you and I, he might even have a person on site in Columbia watching a gusher develop. Nothin illegal about a person monitoring his investment. As to the last point, yes, I'll give you an example, the President of CAFE (and another family member) owned a big chunk of their floorless. Look at their chart, if the company is still around. Look at AIPN, they (the Hunts) apparently used "third parties" to achieve their goal and now when the stock is down from 7 to 1 they are finally converting (HEC has some ways to go). As for the European debenture, I was writing about the May 26, 1998, issue with a ceiling of 6.5/share and floorless features starting in May 2002. As for the presence or lack thereof of the ceiling, go and ask Hayes stock holders what help was the fact that no formal ceiling was in place. The bandits do not need the ceiling (and often use the lack of a ceiling as an "inducement" to management to go ahead, since after all, "the price will go up and we will convert at much higher prices than current prices". That was the story sold to Hayes' management as per Forbes' article. I have done as much as I can in trying to open your eyes to the dangers of the floorless. You can take my advice or leave it. Further arguments are futile and a waste of my time. You should know that in the last two years I have posted floorless warnings on the following stocks, all of which declined markedly after my warning because of the floorless. Go and check their charts, and then rationalize why it will not happen to HEC: EXSO, CTYS, AKSEF, CAFE, AND (from 16 to 6 in less than 2 weeks), AIPN, RNTK, GATE. I got back into few of these after a selling climax (EXSO, AKSEF, AIPN and Gate (a five bagger), but not for any length of time, because the long term implications of a floorless is that the company is in financial troubles and unable to obtain traditional financing. Take it, or leave it. Finally: "Instead, you adopt a somewhat condescending, professorial tone", there is a good reason for that, you behave like a child playing with a dangerous toy and you refuse to listen to any reasonable argument, hoping beyond hope that HEC will escape the ravaging effects of the bandits. I have not seen a stock that has, and thus statistically HEC will succumb (it already has fallen by 40% since my warning at $5/share). In the hay days of Arakis, I had a couch on the Arakis thread to treat people adicted with Arikitis, which refused to see the truth about the dangers of the floorless bandits and tried to rationalize their investments with Strain's dream of an elephant field (10 to 20 billion barrels according to Strain). Look at Arakis then and now and try and see the parallels, where Arakis is now is where HEC may very likely end up. Zeev If you have any heart, you should direct the HEC thread to read this post, but you won't of course, because posting criticism of your beloved stock, rational or not, is against your religious beliefs.

To: drjoedoom who wrote (24)	8/7/1998 9:45:00 AM
From: Zeev Hed	Respond to of 1438

Dr Doom, to the list of floorless I called as such add IELSF which I called and sold at $4 less than two months ago and it is now $1.25. Our friend Cube just brought up good old Borland (now INPR) and lo and behold, they are turning around the company, and under normal circumstances it should have meant better prices, but here we are hitting new lows. Zeev

To: drjoedoom who wrote (24)	8/9/1998 11:22:00 AM
From: Mama Bear	Read Replies (1) \| Respond to of 1438

"You speak of HEC's European debenture as if it were a floorless. If you and I are thinking about the same issue, it's not a floorless; it's a straight convertible debenture. I pulled the S-3 filed 6/26/98 which describes HEC's series F convertibles and I read the language as that of the floorless "death spiral" convert. HEC does have the option of buying the convert back, but this is a standard clause, and it is not something one would expect them to do. After all, they would not enter into the deal if they did not need the money. So, while HEC does have the option of paying in cash, the question then would be, where does it come from? This is language from the 6/26/98 S-3, and would not be needed in a straight convertible debenture, as the maximum dilution from such is known in advance: "As of June 16, 1998 and at an assumed conversion and exercise price of $4.50 per share, the Series F Preferred and the related options would have been convertible or exercisable into approximately 7,600,000 shares of Common Stock, but this number of shares could prove to be significantly greater in the event of a decrease in the trading price of the Common Stock. Purchasers of Common Stock could therefore experience substantial dilution of their investment upon conversion of the Series F Preferred and exercise of the related options." Barb