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

To: George Dawson who wrote (18821)	10/26/1998 3:33:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

George, With the realization that Tail Wind appears to be unwinding their Series C preferred position at the 15%/mo rate, they may not be motivated to maximize their return but rather to recover their funds as quickly as possible. If this is the case, Tail Wind has been dumping quite a few shares of common stock into the market for the last few months. If Tail Wind converts at the maximum rate of 37.5 shares/month, in less than two months they would be at their 5% limit of 700K common shares with the conversion prices of the last few months. They would then have to get rid of at least half of the common shares before they can convert more preferred shares. Of course, if their motivation is to raise cash immediately, they would not bother holding the common shares. Either way, one would expect that they are selling 375K or more shares of newly-minted common stock each month. At this rate, Tail Wind would have no more than 100 C shares left. Unless the conversion rate plummets, this would be less than 1 million shares, or about 3 days' worth. It is interesting to me that there has been little selling pressure for the last two weeks. Perhaps this is explained by the report that Series B is fully converted. That means that in the last two months all 299 B shares and perhaps 75 C shares have been absorbed by the market. This would increase the shares outstanding by about 3.74M shares, or to about 17.6M. Any additional sales by the Citadel Entities would raise the number of shares outstanding. Greg