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Biotech / Medical : Sepracor-Looks very promising
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To: Bob Swift who wrote (1817)2/21/1999 6:16:00 PM
From: Ed Ajootian  Read Replies (1) of 10280
 
Bob,

IMO any institution that buys one of these convertibles has no interest in owning the stock outright. If that's what they were interested in they would have merely bought the common instead of the bonds in the first place. Remember, for each of these last two deals the conversion price of the bonds was at a premium to the then-market price of the common -- even more than the present value of the interest payments that are called for on the bonds.

The CB holders IMO are looking for a relatively brief joy ride, then pull in the sails and make sure you have the money to play with on the next deal. The CB holders are risk-averse and are not fond of seeing their investments tank 15% in one day.

Having said this, though, I think the period of time 'till the first possible call is important. We still have two years to go, and many may be figuring to let it ride for a while yet since a lot can happen in two years.
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