Micron Only Forum Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum

MU 242.20

-1.9%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Zeev Hed who wrote (50845)	3/17/2000 6:12:00 PM
From: Steve Robinett	Read Replies (1) of 53903

--Zeev You seem to be under the misapprehension that MU's convertible debt is "floorless" convertible debt, AKA "death spiral" debt. Wrong. This is ordinary convertible debt. The conversion aspect sweetened the deal when the debt was issued. That's all. The convertible debt holder can convert at any time. Once the debt becomes callable (some of it this year, some of it later) MU can force conversion by calling the debt if MU's share price is higher than the conversion price. In any case, the amount of shares will be absorbed in only a few trading days and have only a small dilutive effect. Just because a security is "convertible" doesn't necessarily make it a problem. MU is nowhere near having to scrounge the bottom of the financing barrel like companies that use "death spiral" financing with variable convertibles. I have no idea where you got that misinformation. Best --Steve P.S. Why would anybody write deep in the money covered calls , as you suggest? The object of covered call writing it to capture time premium, not guarantee the stock gets called. Evidently your grasp of option strategy is as poor as your understanding of convertible debt financing.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next