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To: GST who wrote (37470)1/28/1999 5:22:00 PM
From: IceShark  Respond to of 164684
 
GST, The secondary offering certainly put a nail in IOMG, but the top was really a classic blowoff, if I recall correctly. I don't think the secondary came until it was down about a third from the top. I'm still trying to forget that nightmare, and will not go back and refresh my memory. -nfg- I shorted it, went underwater by 100k, almost covered but held off for a day, and then low and behold was up about 30k. All in the span of less than two weeks. While I came out looking good, I never want to go through that again - what a freaking nightmare.

The difference is IOMG was a single company that had a mania cult following; this is a whole sector, so I'm not too sure how comparable the situations are. i.e. The Inut maniacs could just move away from AMZN to another Inut so it might not take as much to break its back.

Additionally, I not so sure IOMG could tap the debt markets at the time, I think they were close to technical defalut on loan restrictions. So if you can get fools to lend you a billion at 5%, why not?

Regards, Ice



To: GST who wrote (37470)1/28/1999 7:02:00 PM
From: Circle  Read Replies (2) | Respond to of 164684
 
In terms of its probable future effect on the price of the common, there is no difference between this offering and selling about $500 million in straight common at a discounted price.

In many ways, this offering could prove more destructive to the price of the common than a normal secondary offering, since most of the participants (who are all institutions) will be partially or fully hedging or arbing their positions using the common.


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