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To: Annette who wrote (2039)	12/9/1998 9:39:00 PM
From: shane hartman	Read Replies (1) \| Respond to of 27722

Convertible securities are usually bonds with a twist. They pay interest, but they have the right to be converted into shares of common stock at a set price, like an option, at which point interest ceases. Companies issue these to raise money that will later be turned into equity. Navarre did an issue of convertible securities. What happens with convertibles is that if the stock price rises far above the conversion price before holders are allowed to convert, they will short the stock to lock in gains. If the stock goes down, they cover and make money. If the stock goes up, they convert to shares and cover with the new shares.