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Re: pjwilson post# 175436

Sunday, 06/04/2006 2:39:06 PM

Sunday, June 04, 2006 2:39:06 PM

Post# of 286379
Most hedge funds by contractual agreement with their investors are obligated to liquidate their shares....for example if and when GZFX draws down on the second SB-2 the equivalent amount of shares WILL be sold onto the market. They (GGI) makes their money based upon the fact that the shares are purchased at an 18% discount to current market conditions (using the average weighted price over the previous 20 days of trading).

Essentially, the lower the shareprice goes, the lower GGI cost...they sustain nearly zero risk and stand to make a minimum of 18% on their investment....

Now that is not to say that some of GGI's backers would not purchase shares of their own to hold, but it is unlikely....given the sudden availability of large numbers of shares the shareprice will fall and the risk is often times too high to hold.

One more point....GGI currently does not have 4 billion shares to sell...they obtain the right to purchase CD's only once they purchase shares of GZFX stock at 1.09 per share....high price but if you do the math, they get one hell of a return for that 20 Million (their obligation if they take full advantage of the SB-2 shares..which they will if GZFX asks them to)...

Also, no hedge fund ever tells a company take the deal or else we are going to withdraw the offer...that is just not so! Why would they do this, they would lose, not GZFX.