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Strategies & Market Trends : Temp. Home of Cooperative Group-Trading
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To: Zeev Hed who wrote (365)6/24/1999 1:57:00 PM
From: Gerald Walls  Read Replies (1) of 790
 
the bandits get to convert at 10% or 15% discount to the current market or the ceiling of $5.5. You can find a "scenario" on the "floorless" thread (search subject) the third post on that thread.

Thanks, I'll look there. What I hear you saying is that a holder of this bond would benefit as if they held a call option if the stock rises but since the easy money is made by shorting and then driving the price down this is what always happens. The worst that can happen to the short who holds this bond is that if for some reason the stock skyrockets then they have to convert at $5.50 to cover. Pretty much riskless for the bond holders to short.
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