Who would want to convert with the common at its current price, and near extinction? Until confidence in the company is restored, it would certainly be more advantageous to hold on to the Convertible Preferred, with its superior fixed investment yield.
Come on, Paul. Is the company near extinction, or not? If so, it doesn't matter what the convertible holders do. If they convert, they get worthless stock. If they don't convert, they keep their convertible preferred stock, which will also be worthless.
On the other hand, if the company isn't near extinction, they can convert -- immediately now that delisting has been announced -- at 3/8, or 1/4, or 1/256, or whatever the stock settles at, and thus end up with 95% of the stock. The only good thing is that they will then fire all the managers, who will never work again anywere, except perhaps at an unsuspecting Burger King. |
