Paul: You've got a point there, but I think most folks are assuming C.C. is engaging in Clintonesque speaking. In other words, out right lying. Lying? Nah...that's never happen in the BUSINESS world, would it? Particularly not in the financial world? Could it? ;-)
But even if they're not, I posit that there resides in the marketplace jungle a community of hedgies, tacticians and individuals who work over company financial filings just so's they can find a floor-less convertible. You might consider them doing the inverse d.d. to what ordinary investors do when examining a potential equity. Everyone in this aforementioned community knows how they work, and more importantly, they all know the nefarious aspects of these convertibles. So once a carcass...eh....company, is discovered why they then gather 'round in anticipation of the convertible being allowed to kick in. Of course, they also "prime the pump", so to speak, in various ways. Once it kicks in....why...a party ensues. Even if it isn't being instigated by the originator of the tranche, it's a foregone conclusion they stand to benefit so, most probably, won't choose to intervene. And from the tacticians point of view it's probably felt the company now under assault can't offer much resistance either sooooo....one could say it becomes a shorties paradise, at least for a time. But if this isn't being instigated by C.C., then I think the shorties need to be careful, because their best laid plans of mice and men could end up painting themselves into a corner. It's terrible to outsmart yourself. Just like the longs did at $11.
Of course, this is a complicated answer to something which could be quite simple. Mark could be right. This company is doomed to fail because of fundamentals. The explanation for this recent slide could be a simple as that. The company is failing simply due to poor merits, cash burn rate, etc.. But this doesn't make much sense to me, because if this was the case it should have happened long before now...indeed, what're the odds we'd have had that "rolling" period from January through mid July if this was truly the case? None, to my way of thinking, so there must be more going on here than meets the eye. The curious thing is this all began to happen at just about the time the floor-less kicked in, and indeed there has been a Shermans march to the south since the conference call, where what was presented by management was the best we've heard to date.
So I'm in agreement with what everyone else here has concluded. VLNC is being played by some professionals right now. Some very good professionals. For their own reasons, and to their own ends. All we can do is stand and watch. Yet even though this is the way it is, it all still comes down to VLNC management being able to deliver on recent statements made. They still, based on their c.c. commentary, have ultimate control of their destiny. Sooo....given this....about those OEM p.o.'s....
John~ |
