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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Greg Hull who wrote (17952)	9/6/1998 2:48:00 AM
From: George Dawson	Read Replies (2) \| Respond to of 29386

"As of 8/26/98 there were 13,852,080 shares outstanding. If all convertible shares and warrants were converted/exercised, there would be 25,416,147 shares outstanding. Am I reading this correctly that the 25M figure includes Series C convertibles, even though they are not eligible to be converted today?" Greg, My look at the numbers shows that they do not add up. If you look at Table 1. and add SHARES OWNED + SERIES B + SERIES C + WARRANTS = 24,851,259. Leaving out the SERIES C and adding the current outstanding shares gets me to 22,067,019. Kerry's previous post (#17931) indicates that some of the stock has been converted and form the May proxy statement: "The Series C preferred stock is generally not convertible into Common Stock until June 20, 1998..." If Table 1 includes all preferred share holders there is $2.9M of Series B and $9.8M of Series C. Form the "Plan of Distribution" there Selling Shareholders "may enter into hedging transactions with broker dealers and the broker-dealers may engage in short sales of the Common Share..". I don't think it is in anyone's interest for Ancor to go out of business - but it is in the preferred shareholders' interest to covert at the minimum share price. There is a section on listing requirements and they do seem fairly liberal, but it is also not in anyone's interest for Ancor to be delisted, so I don't think they want the price to go to less than $1. All of the shorts need to cover before they convert and go long. As John G. pointed out this is usually done for a brief period of time to minimize the risk on the short side. That risk is not high enough the price stays depressed while they load up on shares with the conversion. I would guess the narrow price range is necessary if you want a substantial short position while converting at the same time. I a large contract comes it is better sooner than later, since it obviously limits the dilution. Another significant variable is the next round of financing. If there are convertables with similar provisions - well you know the story. George D.