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

To: Kelly Igou who wrote (17971)	9/8/1998 3:10:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

Kelly, I'm responding, but not because I have any expertise in this matter. My understanding is that they cannot convert a share of preferred stock if the conversion would cause them to exceed their limit (4.9% or 5% of outstanding stock). They must be kept informed of the current amount of common shares, because the more shares the other guys convert, the more shares outstanding, the more they get to convert. I don't know how many ways they have to distribute common stock from their holdings. Obviously one way is to sell it on the open market. I'm guessing that another way is to cover any short position they might have. Possibly they can make their own private placements, or gift it to someone or some thing. I'm surprised that the short position isn't higher. As of 8/15/98 (I believe), only 1.4M shares of common stock were sold short (thanks Craig for the link). This is less than 15% of the common stock represented by the preferred shares as of 8/26/98. Of course if the short positions reported are just a one day snap shot, we have no idea of what the positions are the other days of the month. George's post of John. G's comments suggested that the shorting would often occur just days before a conversion. It would be nice to see what the short position was for the days following 8/15/98. I think we have a problem with the granularity of our data. I would have thought that the big boys would have shorted at higher prices to lock in a profit. Perhaps they didn't expect to see the price fall either, or maybe they don't like to maintain a long term position in common stock - either long or short. I don't think we know the true position in common stock being held today by the big 5, and perhaps it is none of our business. What are the reporting requirements of or for large common stock holders? I'd sure appreciate the input of someone whose experience with convertible offerings is longer than my 3 days. What do you guys think? Greg