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Microcap & Penny Stocks : QDRX -- Ignore unavailable to you. Want to Upgrade?

To: J. Davies who wrote (3602)	8/30/1998 1:08:00 AM
From: bambaata	Read Replies (2) \| Respond to of 3977

After Mr.Hayton's group were bought out 2 1/2 years ago Big Jim and his crew sold 30,000,000 shares of REG.S stock in the united states(bad reg.s) what a joke. Big Jim only lost his horse power (and stopped porking all the staff) when the SEC cut out phony REG S issues this year I heard Hayton is suing the little fat creep for $100 million for fraud has any one else seen the law suit or press release? Any one want to join in!! send me a PM!

To: J. Davies who wrote (3602)	8/30/1998 11:54:00 AM
From: Glenn Olsen	Read Replies (2) \| Respond to of 3977

It has been virtually impossible to determine the "shorting" where reg s and d have been concerned. Since reg s was only supposed to be sold to "foreign" companies/investors the rules for accounting never quite matched what people might think. Technically reg s had to be held a short time before it could be sold back into the US markets but it seems that immediately the shares sold at a discount to the market were shorted back in technically avoiding the sales prior to the actual day. Immediate profit. Reg d with its varying maturity/option dates offered even more lucrative terms. A loan of $1 million would offer various dates for converting to stock at levels of discount. Again immediate shorting at the current price provides not only the gain on the discount say 30% but then the exercise at maturity would net a discount to the then current market price. So the $1 stock drops to $.80 due to the dilution then the exercise at the discount $.56. The $1 million loan is immediately recovered by selling short 1.4 million shares at $1. Gain $400,000 (they know they can buy 1.4 million shares later 1,000,000/.7 The dilution drops the actual market price to $.8 They get their $1 million option which now buys roughly 1.8 million shares at $.56. They cover the 1.4 million short position and still have roughly 400,000 extra which they dump on the market and make more. Bankruptcy is great for them because they don't even have to cover the short position (short selling doesn't generate a taxable event until they close the position) and they can sue for the $1 million. If they lose they write off the loss against other income but still got to keep the pure untaxable profit of $1.4 million per the example. If they get the $1 million, its just return of the loan and they still don't have anything to report. Yes there is a tiny exposure in the shorting if you believe the stock could go up in value despite the dilution, but they still get to buy at a discount so unless the stock went up over 30% they would at least break even. They also have access to any insider information so before we'd hear any shocking news, they'd get to cover the short position. Those SEC people sure know how to protect the small investor. Glenn