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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Greg Burton who wrote (242)	1/27/1999 9:39:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 1438

Greg, this story is reminiscent of the RMIL scenario where "supposedly" there was a big naked unregistered short position (it turned out to be barely 100,000 shares or so), greater then, supposedly, the number of outstanding shares. I have not followed the VRFT story, but if indeed it went from several dollars to $.09 due to the activity of the floorless, they must have converted some of these floorless to deliver against their short (they would not sell their convertible paper to a "white knight" without closing the other side of the hedge). I thus doubt that there are only 7 MM shares outstanding, that must be an old number and the new number will surprise many. If the floorless did not keep some of the paper to hedge their short and they sold that paper while still short (quite stupid, and thus doubtful), then yes, there might be pressure on the stock. It is more likely that the delay in delivery of stock was due to the company not being able to keep up with the conversion, and thus the delivery of the new shares to the people that bought (when the floorless sold short). I would view this as a dangerous situation. What is VRFT's business and what are its general prospects as an ongoing concern? Zeev