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To: shane hartman who wrote (1886)	12/8/1998 10:13:00 PM
From: TraderGreg	Respond to of 27722

Holders of convertibles short for two reasons: 1. By shorting they create an open position, a sell but no buy=>no tax liability. 2. While still holding the convertibles, they earn interest. If a convertible with a conversion price of $4 is shorted at $11, worst case scenario you lock in a $7 profit. If the stock goes to the moon, then you convert and cover. If the stock tanks, you buy and cover, still holding the convertibles for a future run. TG

To: shane hartman who wrote (1886)	12/8/1998 10:13:00 PM
From: RockyBalboa	Respond to of 27722

Yes, so is it and therefore such clauses are contained in the statements regarding the convertible issue. That is necessary to give some security to the money lender (convertible buyer). Because amongst the companies doing such deals are that crappy ones, that continued trading, Nasdaq listing, ... is on the verge... Remember the lender has nothing in hands other than stock and a company trading on the exchange where he must sell the stock to recoup the money he lent. Its a high-yield business with quarterly yields over 10, 15% if that works, but if it fails when the converted stocks are just not to sell? If NAVR was a $1 stock in the meantime? C.