Dennis, I think that VLNC might face a double "whamo", one hit is the market general weakness, and the second is the absence of a "material" PO. We are also approaching a critical price, the ceiling of the convertible. I have a "gut feeling that CC hedged at least part of the position at prices 20% to 30% above the ceiling, and when the stock got near the ceiling, they started covering (creating the support there), if it is obvious to them that a PO is not near, they may not be so generous, and they should know better than we do if such a PO is forthcoming in the near future, much more than we do. Thus holding the low 6' would indicate they still have faith, but if the ceiling is breached, we might have a sharp fall to maybe even below $5, but at least the very low $5', IMHO.
Zeev |
