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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Bill/WA who wrote (52441)	3/18/1999 10:51:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Bill, Converts on internut stocks make sense for the issuers. They get cash and, given the appetite among the ingnorati, won't have to pay much for it. So what if they dilute future eps? Those will never happen anyway. That is the old pair of dimes. <g> I would not buy an internut convert except as an arb (short the stock against it). Even as an arb, I don't see much upside. These are zero/one cos., that will either make a ton of money (probably 5 of them) or go belly up (the other 1000 of them). A convert holder assumes that the issuer can pay interest and I don't see where a rational person can make that assumption. The only source of positive cash flow is selling stock, and that will not exist in a downturn. I do think these new issues will make me give my old favorites, Convertible CEFs, the hairy eyeball. The managers will have performance pressure to buy this garbage and, depending on how much they grab, that could change them from fairly conservative to high risk funds. On the MU question, you ought to ask Earlie as he is up to date on the TXN position.