Seems like there is a little battle between the
bandits and the MM's going on. MM's know bandits want to
hedge their position. No buying to speak of, so when
bandits try to sell any size, MM's drop the price way
down. When bandits' order is filled, MM's raise the
price back up to see if they can sell any shares at
higher prices. When the sell orders come back in, they
drop the price again.
Each time this game is
played, the price goes a bit lower.
Covertible debentures and convertible preferred
shares are used all of the time by companies who are in
good financial situations.
between the normal convertible securities and the toxic
varieties is that the conversion price is FIXED for the
normal varieties. You know exactly how many shares the
holder of the convertible securities will get when they
convert. There is no incentive for the holder to drive the
price down. In fact, normally the conversion price of
such securities is at a PREMIUM to the market price
when they are sold. The holder gets the interest on
the convertible securities, and if the price goes up
enough, they convert those securities to common
UOLP's convertible debenture has a VARIABLE conversion
feature with a CEILING ($5.50) at a DISCOUNT to the
market. It has no FLOOR. Once the price of the common
stock is lower than the CEILING the debenture holders
get more shares when they convert.
posted the comments about convertible debentures has no
business owning risky small cap. stocks. They knoweth not
what they are doing.
Wrong at the same time. The companies you cite as
examples did do convertible debentures. There's absolutely
nothing wrong with issuing a note or preferred stock that
is "convertible" into common shares.
thats where the similarity stops...cold....
did what is commonly referred to as a "FLOORLESS"
convertible debenture. THERE"S A BIG DIFFERENCE.
the stock goes down, and due to the terms of the
debenture...it will...the debenture gets converted into
stock...at a discount. The lower the stock goes, the more
shares get converted...the more get sold...the lower the
price goes...the more shares get converted. It's a
cycle that once it starts...blossoms into massive
dilution to the existing stockholders. The amount of "new"
shares issued simply snowballs.
The more get issued,
the more get sold which keeps depressing the
The examples you cite had provisions in their
debentures with set
conversion limits. The difference is
monumental. I suggest you learn the difference.
I don't work for the company, and I'm not their
press agent, but the fear running on this board is
severe. UOLP has created a strong base to truly become a
highly successful company. Management has demonstrated
their ability to develop a great product, improve it,
market it successfully, hold onto clients, sell
non-performing divisions, and have a capital base to continue
1) Hambrecht & Quist are backing
UOLP with a $3,000,000 line of credit. (Sounds like a
vote of confidence with management to me)
Tellabs, Lucent Technologies, Fidelity Investments, Qwest
Communications, The University of Texas all have given enough
confidence in UOLP to give them major contracts and
financial resources to develop their future online
3) The United States Government is only beginning to
tap into it's online training potential. Who did they
chose to give a major contract to?-- UOLP.
Online revenue growth from courses is tremendous. Online
revenues more than tripled over 1Q '98, and 4Q '98 quarter
to 1Q '99 , revenues jumped 59%.
continues to leap into new avenues to expand its
educational online strategy. In the last two months, it has
announced expansion into construction, food resources,
hotel management, education, and continues to expand
its domination of the huge telecommunications
6) UOLP's sale this week of its HTR Knowledgeworks
unit gives it additional cash, as well as the
opportunity to be focused mainly on its internet strategy.
This will give it greater momentum and exposure as the
leading internet educational company.
7) UOLP has
shown it is aggressive. Look at the press releases the
last 2 months. It is moving--- upwardly!!!
Other companies having used this form of
financing in past/currently:
2) Consolidated Natural
Just bailed out of this puppy because of the
latest financing. However, the training business is
where to be. Have just moved my money into ITCC (ITC
Learning). They have every piece of the training business in
place, they are about to explode. Don't buy because of
me, go do your own review but i expect a triple to a
5 bagger within 12 months
As someone who had held UOLP for more then 18
months,and that is a distinct minority, I am amazed by the
cycle of converts attracted to this board. Do people
really think they can wish performance into this
company? Perhaps they should review the comments of a year
ago, to see if anything much has changed. I am not
that sophisticated an investor but can recognize
broken promises, and the lack of leadership or
innovation and the often desperateand all to frequent
management decision to seek out the financial trough. But
thats just my opinion.