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To: Wizzer who wrote (808)	10/10/1998 7:10:00 PM
From: keith massey	Read Replies (1) \| Respond to of 4467

Another couple other points about private placements for people not familiar with them. I agree with Wizzers statement that a lot of stocks go down soon after the private placement is completed. I have always thought that a lot of companies promote up the price of their stock to get the best price for the P.P. When the P.P is complete the promotion ends and the stock drops - plain and simple. 1. Most private placements have a hold period of at least one year. People taking down a private placement today cannot sell their stock for at least one year. When researching a stock I go back one or two years and find out who has taken down private placements, at what price and when those shares become free trading. If the people taking down the private placements have had a history of stock promotion then I wait for signs that a promotion is starting. A lot of times the people that took down the P.P will promote the price of the stock up so they can dump their cheap stock. Note - The rules on the VSE have recently changed and allow hold periods of only 4 months for some Private Placements. On the flip side - if the P.P were taken down at far higher prices by institutions then you often see dumping when the P.P comes free trading. This often drives the price of the stock down temporarily. If I see a stock dumping I often go back a couple of years and try and find out who is responsible and why they are dumping. Often the president or other high up officals in a company will tell you where the dumping is coming from. Once again - my two cents Best Regards KEITH

To: Wizzer who wrote (808)	10/11/1998 12:52:00 AM
From: Kevin Hamlin	Read Replies (3) \| Respond to of 4467

Interesting comments Wizzer. A few thoughts: I understand your math based on share dilution....seems simple enough....but your math assumes that the share price prior to the placement was an accurate reflection of the market sentiments rather than being temporarily manipulated down. Yes, dilution is a factor that math can be applied to, but I would suggest the math be applied to a price prior to any manipulation that may have taken place. The way that I would look at UBS (given that is the example being used here....insert whatever stock you might like) is the following. 1) Someone steps up in a big way and puts their money where their mouth is, strongly endorsing their belief in the company. 2) At the end of the day, there were over 200,000 shares on the bid between .20 and .23 (check the depth). That's more interest in one afternoon in UBS than I've seen for weeks and weeks. Perhaps this view is simplistic, but I tend to take an approach that says "follow they money". The person who plunked down $800,000 on UBS is certainly playing with a lot more cash than me, and undoubtedly has far more knowledge of the company and its activities than I could ever hope to have. Would any of us place that kind of money on something we weren't VERY confident about? Not me. I think just a raw math approach might be too simplistic when looking at PP's for a given company. A broader view might incorporate the following: 1) Manipulation of the price from reasonable levels: Was the price knocked down? Was the placement "known" in the market already and reflected/adjusted? 2) The size/importance of the placement: Is it a large placement that can have the added benefit of showing the market the confidence of some well informed individuals? Does the placement have positive sentiment building ability through the sheer size of the endorsement? 3) The timing of the placement: In the case of UBS, I noticed that the general meeting was this coming week....coincidence???? 4) And finally, as you correctly stated, the effect that the share dilution has on the company's existing shares. Consideration of all of these factors (and probably a bunch more I haven't even thought of) might hopefully lead to a more broadened opinion as to whether to jump in or sit it out on the side. Well if nothing else, some good discussion is being generated here. Thanks for taking the time Wizzer to add your comments. As always, it's a great education coming here to one of the best threads on SI! Cheers Kevin