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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Michael who wrote (13585)	9/10/1998 1:01:00 AM
From: chester lee	Respond to of 18691

micheal, Have you or anyone else seen Prudential's "accumulate report on ALTIF. I'm interested in their reasoning for this obvious P&D. I was short and covered after they redeemed their floorless convertible. They really DID have to buy back their convertible, or else the dilution from the immenient conversion would have brought the stock to sub $2. Recall that they did the discount convertible deal in order to raise the much needed cash. Now they turn around and spend more cash (than what they received) buying it back so that their common stock price doesn't get decimated. Basically they got a really expensive short term loan, and they are still low on cash. I think the key to a profitable short in ALTIF is to understand the "potential" market for their centrifugal jig (CJ). My understanding of the value of the CJ is for minimg rutile, a by product of the TiSO2 process. TiSO2 is used in the manufacture of paints. The question to ask now is: how many titanium mines are available to accommodate their new fangled dangled jig-a-ma-jig. Someone in a private email told me they have 3 Ti mines in Florida. So assuming the jig works, and they employ it at all three locations for Ti mining, and they even sell a few to others mining Zircon and Gold. What revenue would they produce. The sales would be one time events. The Ti mines would produce a cash stream. Secondly, what is PRU's involvement? recall several news releases ago that they said if the CJ works, they would need additional money 70mm to 100mm?? I don't recall. They are not going to pull this money out of their rears. Thus, PRUs role may be to promote the stock and than offer some form of additional financing. A secondary??. With a higher stock price, they can re-do the prefer stock bit and do another DC deal, getting even more money. But I don't think that's PRU's bag, so I'm a little confused. Anyway, I would not go long this stock. It's just a matter of timing when to short. chester