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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Rich Wolf who wrote (9251)	3/13/1999 4:41:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

Rich, one more time. ANY time you short you have to borrow shares. Yes, you need collateral to borrow. And they might be using their preferred shares as collateral. That does NOT mean they have pledged or transferred these shares to anybody else. They simply have to show their broker they have the resources to cover. This could be cash resources or shares. It would be foolish for them to "pledge, or transfer" these shares to their broker, because they are earning interest on their preferred shares. I would also submit it would be foolish for Castle Creek NOT to have a substantial short position, acquired at prices significantly higher than than the $6 fixed conversion price. Why would it be foolish for them NOT to have a substantial short position? Because they want to earn a profit if the price goes up or goes down. How do they earn a profit if the price goes down? By having a short position already established at higher prices. Yes, they are in the business of making money. And they have probably set themselves up so they make money no matter what happens to the stock price. The way for them to do this is to have established a substantial short position at a price significantly above the $6 fixed conversion price.