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Pastimes : Investment Chat Board Lawsuits
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To: Jeffrey S. Mitchell who wrote (3350)6/24/2002 4:07:53 AM
From: marginnayan  Read Replies (1) of 12465
 
In most cases conversion happens usually after 3-5 years. So if let's say the price rises after the convert holders short, do they not have to cover while the stock is rising. I do not think they can wait 3-5 years out to cover their short position.
I still do not understand why the price would always fall when the company issues a convert. Since only one or two brokerage houses would be involved in the converts. And there are several market makers making a market in that stock. This would then indicate a joint-effort by all mm to drive the price down.
I know of a company that did a convert. Just before the convert press release, the stock price started to move up and did even after the press release for another 1-2 weeks.
After that it just went down almost 60 %.
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