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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mama Bear who wrote (2743)	9/8/1998 7:59:00 PM
From: RockyBalboa	Respond to of 18998

Thank you, Barb, for a stock printing machine, GMGC has strong action on some days, like today. GMGC acts like a small money printing machine. Sell it over six, buy it at dips. Maybe I should adjust the price range a bit now as it could approach 7,5 again. Never believed that MCHM could bounce that far. But the double jump (5 /13, 5 11/16 effect was nice and allowed for safe increasing the short, before it is off 5. Btw: Did you read that sad story about the innocent PJ in: biz.yahoo.com as well as cbs.marketwatch.com I notice that the touting machines run at half steam, now. Guess what will be next. Christian

To: Mama Bear who wrote (2743)	9/8/1998 9:49:00 PM
From: Kurthend	Respond to of 18998

Barbara, Here is my take on the convertibles (a quick synopsis) from what I have read over the months. I take no responsibility for the actual numbers as I have no notes in front of me and I am too lazy to dig through the SEC site to get specifics. You may disagree, but all of the below is IMO. I will have to look at my notes, but I believe the worst case scenario is around 49 million shares outstanding (current shares outstanding is around 29 million) : Series A-Series A are for MSFT. The conversion rate is $1.24 which is a fixed rate. Series B-Series B was sold to a group who specializes in these type of convertible stock offerings. These shares are convertible at the lower of $3 a share or 85% of the of the common stock price at the time of conversion. The total face amount of these shares was I believe around $7,000,000. Using $3/share as a base, this issue was convertible into @ 2.3 million common shares. (A word of note, that when the Series C preferred stock was issued, $2,500,000 of the face value of these shares could or would be converted and thus I believe $4.5 million could then be exchanged for an amount of 1.5 million shares at the max if the stock were to reach as low as $3 per share). IMO, it would be difficult for a single entity with only 1.5 million shares at stake to short the stock below $3 considering the future potential of GMGC. The risk would be enormous for this group if they tried to push the price of the stock down to $3, especially if GMGC comes out with much anticipated news concerning resellers, telecos, European contracts, etc. The upside far outways the downside at the current price (IMHO). Series C-Series C is convertible at either $19.5 a share (based on the date of the price of the stock at the time of the offering) or at a premium of 135% of the market price at conversion. This is for funding for I believe $32 or $35 million. The stock can't be converted prior to the end of November, 1998 and any conversion is limited to 4.99% of the total outstanding stock of the company at the time of a conversion. So, the max price is around $19 and the min price is around $5 (1.7 million shares / 6.4 million shares). Also, a maximum of 25% of the shares can be sold each month. This will help the dilution factor in terms of spreading the dilution over a miminum of 4 months. IMO, this group of investors would be better off at either an extremely high price or extremely low price. All of the above is IMO and I am not a financier. Just a poor dirt farmer who is trying to make money in the market. All of the above is also just a basic overview. I stand by my remarks that the convertibles are not floorless. Take care and thanks for your previous notes, Kurt