Thanks for the correction.
Seems that CC gets to pick the lowest six days of the ten trading days, and the average is computed based on the bid price at the close for those six days.
I don't have the bid prices at the close, but the closing prices for the last ten days are:
6-Aug 5.7813
9-Aug 5.9375
10-Aug 5.5000
11-Aug 5.4375
12-Aug 5.4375
13-Aug 5.5000
16-Aug 5.4688
17-Aug 5.3125
18-Aug 4.5313
19-Aug 5.1250
If I take a 1/16 off each closing price, and pick the six lowest, I get a current conversion price of 5.16 at this time.
Lets look at three cases:
If the stock rebounds to above 5 1/2, then CC must convert within four trading days, or their conversion price will begin to climb.
If the price stays at 5 1/8, then CC must convert within eight trading days, or their conversion price will begin to rise.
If the stock price drops to 4 3/4, and stays at that price, then CC must convert within eight trading days, or the conversion price begins to rise.
Of course, CC may not elect to convert at all. In this case they pass up getting an additional 210,000 shares over the fixed conversion amount. At $5, this is over a million dollars in additional shares. The question is whether CC takes the million in the bag, or chases two million in the bush.
With a million dollars of shares at stake, its easy to see why someone might want to short/sell shares in a big way before each day's close.
Today, the selling into the close was overwhelmed by ready buyers who were lined up.
All this is simply my opinion and analysis, and anyone can disregard it freely.
Paul |
