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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (299)	4/25/1999 6:35:00 PM
From: Frodo Baxter	Read Replies (2) \| Respond to of 752

Anaxagoras is incorrect to compare RRRR's warrant reset with a floorless convertible. This is a $6 mln dollar deal. In a true floorless, if the stock was trading at $.10, CVI would have 60 mln shares. Here, they have 2.41 mln shares because of the $2.49 floor, and 693,642 warrants with their strikes reset at $.01. Anaxagoras's error is this: The amount of warrants that can potentially be reset is limited to the amount of warrants issued, 693,642. There is no doubt RRRR was a basket case before Apollo came in. But pinning hopes that Apollo deal will get undone is foolhardy. By my calculations, already posted, Apollo has already made more than 100% off their investment, and they haven't even signed the equity agreement yet! They will not back out of this deal. From now on, one must value RRRR as a going concern, not as a bankruptcy or delisting candidate. Again, I'm not saying I'd buy this stock, but lumping it in with the usual swill with attached death spirals is just plain wrong.