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Technology Stocks : Apple Inc.
AAPL 259.06-0.5%Jan 8 3:59 PM EST
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To: HerbVic who wrote (24292)4/22/1999 4:36:00 PM
From: rhet0ric   of 213181
 
Why would a bond holder want to short?

My understanding is that the bond holders can't simply convert their $29 bonds at a higher AAPL share price whenever they want. But they can effectively do this by shorting AAPL at a higher price. When they short, they are essentially "borrowing" their own shares (bonds) and selling them, rather than borrowing someone else's long shares. Then when the bonds are converted, they exchange their shorted shares for their converted shares. In this way they can lock in their profit at a higher value, i.e. at whatever value they shorted at.

Of course, my understanding could be totally off, in which case read Eric's site instead.

rhet0ric
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