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

To: Craig Stevenson who wrote (19146)	11/5/1998 6:17:00 PM
From: nic	Read Replies (1) \| Respond to of 29386

If we don't see a big downward push tomorrow (Friday), I would be tempted to believe that the Reg D selling has subsided. Craig, I'd qualify this with a "for the moment" - as the conversion price continues to rise, I suppose we might see another attack, er, buying opportunity. A week or two without news, and we're vulnerable again... - nic

To: Craig Stevenson who wrote (19146)	11/5/1998 10:46:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

Craig, <<We should have pushed the $1.125 close on October 8th out of the conversion window. So, we go from a conversion price of $1.156 ((1.125 + 1.09375 + 1.25)/3)) today to $1.198 ((1.09375 + 1.25 + 1.25)/3) tomorrow. If things don't collapse on Friday, we should move to $1.25 ((1.25 + 1.25 + 1.25)/3) on Monday. Does this match your calculations? (I'm using 20 days.)>> I agree; I think we are in sync. <<It might not look like much, but the Reg D guys would have to push things below $1.25 to do themselves any good now. If we don't see a big downward push tomorrow (Friday), I would be tempted to believe that the Reg D selling has subsided.>> It does appear that the selling has subsided. The volume has been low to moderate for quite a while and the price has not been drifting down like we saw previously. The incentives to sell are still attractive (around 100% annual return based on recent conversion prices), but few if any preferred shares are being disposed of now. Even if the conversion price is allowed to rise naturally, the return isn't too shabby. If prices are flat for the next week, a preferred share sold and converted next Friday would still have a 50% annual return. Shenanigans can be performed at any time of course. If they aren't planning on converting any more shares for the next couple weeks, depressing the price today may not be to their maximum advantage. I think their efforts are more effective when they work in concert with other forces, i.e. general market collapse or bad Ancor news. Maybe they want to keep their remaining arsenal available for that opportunity. If I am remembering correctly, we have not had a large volume day for at least 1 month. I am reasonably sure that short sales are recorded in the daily volume, but I have no idea whether short covering by delivering newly minted common shares is recorded. It would make sense to me if a substantial number (say 1M) of the shares from the Oct short report have been covered. This could only be true if short covering is not included in daily volume, unless normal daily trading is much volume than I think. Can anyone confirm or refute that this short covering would not be included in the daily volume we see? The high volume around the end of September must have included some short selling. If these shares have not been covered by now, they are either naked shorts or are shorted against a long common position. By a naked short I am including shares that won't be converted for more than 20 days, that is for an indeterminate conversion price. If the short position has not dropped significantly from the 10/15/98 report I am at a loss for a rational explanation. If there is an equivalent long position, why not close it out (tax implications?)? A naked long position makes some sense to me, but not a naked short. It is my sense that efforts to attempt to recover sub-$1.25 conversion prices would likely fail without bad news from Ancor. The buying power now may exceed the selling power. I doubt Paine Webber and others are participating in the conference calls for their health. Either they are protecting their current inventory of ANCR, or they are trying to determine when to hop on. When will they view the risk/reward as sufficiently attractive? Two more weeks of $1 5/8 or higher will make me pretty confident that the worst is behind us. Greg