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Strategies & Market Trends : Shorting stocks: High fliers -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (575)	11/23/1998 5:48:00 PM
From: Q.	Read Replies (1) \| Respond to of 709

Christian, re. BFLY, did I understand you correctly that there are 1.5 M warrants, and 2.7 M shares of common out now? Calling that many warrants could really put a lot of pressure on such a small number of shares out. Considering their liquidity problems, the co. should be highly motivated to call them if they can. So it seems to me that this should put a lid on the stock price. If not now, then a few months from now when they've had time to register new shares for the warrant holders. Considering the warrant call price of 8.25 is below the present market price, it looks like a win-win situation, if one is patient enough. Either the stock drops below 8.25 soon allowing a profitable cover, or it stays above and the co. calls the warrants. A broker found a few of those 2.7 M shares to lend me Friday, so I'll get to enjoy this one. I don't know if I shorted at an optimal time, though. Maybe I was premature. I would rather have a more convincing timing factor, for example if the criteria for calling the warrants were already met and a prospectus for the new shares were already filed.