Hi APMers. I have a favor to ask of you guys, and I'm hoping one of you can help.
A stock I am currently invested in (Brightpoint: CELL) recently did a form of convertible offering. Like APM, it has seen its short interest rapidly increase, and is still seeing significant downward pressure.
The offering is called a LYON, and is done excusively through Merril
Lynch. The conversion price is $24, and the stock was trading between $20 and $21 during the offering. They yield 4%.
Here is the press release:
biz.yahoo.com
I have a few questions, and I'm hoping that the knowledgable people on this thread can help, since we went through a similar fiasco a few months ago. Hopefully, CELL won't turn into another APM!!! <g>
1. Would hedging against LYONs offer a plausible explanation for a tripling of short interest, and continued pressure on the stock?
2. Would all the LYONs likely be hedged against, and what would this bring the total short interest number to?
3. What happens if someone owns the LYONs and shorts it today at $17, then the price goes up to the conversion price? Have they just lost $7, or is there something I am missing?
Thanks in advance,
Brian |
