Kurt, I'm still a little confused on this short covering thing. If a convertible share holder goes to market and takes a short position, he gains by seeing the underlying price of the shares drop from his selling pressure, which allows them to get more shares for the same dollar amount when they eventually convert. Yes?
Advantage, they get more shares. They get interest while they wait. They make money on the short position.
Finally, when they do decide to cover their short position, they can either go to market buying and driving up the price, or they can simply convert, which gives them a fist full of shares to pay back the shares they borrowed to create the short position. If they aren't buying, but only converting, this seems like a real negative thing.
So, why should anyone suggest they need to buy on the open market to cover their short position? Did they actuallly take a larger short position than their converts will cover?
I don't get it. Again, and again people suggest this short position against GMGC will create a squeeze, but if all the shorts can cover without going to market, where's the squeeze?
Regards,
Mark |
