Convertible Bonds Message Board

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Non-Tech : Convertible Bonds

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To: Rocky9 who started this subject	9/5/2002 5:07:35 PM
From: aknahow	Read Replies (1) of 83

Just a thought. Have been wondering if the risk/reward of owning a convertible bond in a biotech or high risk low asset company really are any different from owning the common. I would think that the price of both the notes and the common reflect the potential rewards and if anything it might be the common stock that is perhaps more subject to undervaluation. The notes with a high yield to maturity scream buy me, buy me. Individuals, not tied to mast and with insufficient wax in their ears, sometimes do. Financial modeling helps institutions from being too impressed by the sirens call. Converts in bankrupt companies of hum drum businesses with lots of assets may make sense. Even just plain debt, when one has the abiolity to figure out what the assets are worth. but in biotechs dependent on drug approval, I am not convinced. But, I will follow the post on this thread and learn that once again I have been wrong.

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