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

To: jm who wrote (3429)	8/16/1998 1:56:00 PM
From: MskiHntr	Respond to of 5504

jm, I don't know where to begin, so I' ll begin at the beginning. "A desperate company..." HEC is desperate? Somebody this date just pointed out they have $ 178 Millions in working capital, the lifeblood of any organization. "Company management willing to dilute shareholders equity:? Dilution occurs with any convertible (Inv. Bus. Daily devotes a section to convertible bonds and preference shares) but not dilution of the magnitude that you infer...ad infinitum. "Management to sell short and make a profit at the expense of the shareholders"? Won't have too many shareholders or a company to run if they pursue this avenue. "Done every day by venture capitalists with the cooperation of management"? Really, this sounds like fraud and willful manipulation. As a fiduciary I have the obligation to alert my compliance department and the authorities. I'll be happy to accept a list of companies and present them to the proper authorities but whoever gives me the list better supply me with backup documentation and, lots of it, because when the feces hits the oscillator the spray will affect everyone involved. "Management doesn't tell the shareholders"? How did you find out? HEC is a listed company, they have to tell all. You know, Forms 10Q and 10K and S-8s , etc. Lots of forms with good information on them. "Oh by the way it increases the number..." Yes, convertibility by definition does increase the number of shares outstanding. "...as well as lowering the price". Sometimes the price goes lower because the dilutive factor reduces the earnings per share. However, if the funds received by the convertible offering are properly put to good corporate use by management, then earnings per share increase and the marketplace rewards the efforts by bidding up the share price. Hopefully, HEC's management will apply the proceeds correctly. "...as well as maintaining management's high salaries". I don't know you arrived at this conclusion. Please enlighten me. "...usually shareholders are asked to increase the number of shares - shareholders lose big time". You are correct. Shareholders are oftentimes asked to approve of a stock split, but splits are not dilutive and shareholders maintain their percentage of equity. Shareholders usually are not brought into the discussion when management is considering financing alternatives. Would slow things done a tad. Remember, management has a business to run. "Management is not working for the shareholders in these cases..." In the dire scenario that you depict you are correct in this assumption and in the rest of your sentence. jm, if, I repeat if, you truly believe that the management of HEC fits into any one or all of the categories you cited in your post it is mandatory that you take your findings to the authorities. If you wish to pursue this I can supply you with the names, addresses and telephone numbers of the authorities that should have this brought to their attention. Sorry to have been so verbose. Thank you for you input. Best,