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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Mama Bear who wrote (83)	9/30/1998 11:59:00 PM
From: Dave K	Respond to of 1438

Barb, I have to say your note on convertibles is most accurate evaluation I have ever seen. Investors should print this out, enlarge it and hang it up in front of your trading computer: >>> "This is doubtful. To date, every one of these deals I have seen is structured so that the 'investor' has a specific profit locked in, with the potential to make more only if the price falls. To be fair, I could not find the terms of this deal on Edgar. But I have heard these same arguments over and over from hopeful longs, only to see their dreams dashed on the rocks by the reality of the death spiral."<<<< Question: Why have so many investors (including fund managers) been in the dark about the impact of these deals. Why has this form of loan sharking been allowed by the SEC without some form of regulation ? It's the closest thing to legalized larceny around. Dave

To: Mama Bear who wrote (83)	10/1/1998 11:49:00 AM
From: Ignite44	Read Replies (1) \| Respond to of 1438

Why would the investor who also has warrents want to drive the price of the stock down?? If the stock price goes to pennies the entire enterprise is at risk and he loses everything. If however he supports the company he wins. Don't forget the investor also holds warrents that can be exercised in the mid 3's so again there is an offsetting intererst to keep him honest. You also have to look at the track record of the investor which has historically supported companies of this nature.