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

To: MskiHntr who wrote (3420)	8/16/1998 12:14:00 PM
From: Thomas M.	Read Replies (1) \| Respond to of 5504

The holders of the "floorless" are entitled to convert their securities into common stock. They are entitled to convert their number of shares into some fixed dollar amount of shares, let's just say $50 million. If the stock was at $5, they could get 10 million shares. If it was at 50&#162, they get 100 million shares. Which do you think the floorless holders would prefer? <g> Normally in convertible preferred securities, there is a limit to the number of shares they can get, i.e. a "floor" in the conversion price. For companies more desperate for capital, the deal is negotiated without such a floor. Tom

To: MskiHntr who wrote (3420)	8/16/1998 12:18:00 PM
From: SDR-SI	Read Replies (1) \| Respond to of 5504

Not to promote the concept on this thread, but I think Zeev's concept of a "floorless" is a financing in which the holder can obtain more and more shares with no limit due to the fact that the indenture for the financing allows conversion at ANY price, no matter how low, at a number of shares determined by dividing some constant number by the share price at a time of conversion controllable by the holder. Such a financing out of control of a company would clearly be detrimental, if the company's stock price could be maneuvered downward by the financing holder. I just can't see where that is applicable to any seriously detrimental degree here, but that's just my opinion. However, I do think the opinion is shared by quite a few others who have sizeable stakes in HEC stock, including the management of HEC. Steve

To: MskiHntr who wrote (3420)	8/16/1998 12:19:00 PM
From: Ditchdigger	Read Replies (1) \| Respond to of 5504

Floorless,is a coined term(Zeev) to describe debentures with no floor,ie,no limit on conversion. As to the shortselling,you as a broker should be familiar with "shorting against the block",ie,hedging. With a double whammy coming when there is a discount to the market price when converting,resulting in more bang for the buck. I'm sure Zeev can(and know he has,here)describe in more detail..DD PS: can only guess you must know the definition of "death spiral" as you didn't question that term..<g>..