Curly, the buyers of the convert use very conservative strategies. They bought the convert, the price then went above the conversion point, they sell short against the block, getting back (depending on the shorting point) much more than what they paid for the convert. They leave this position as is, since they have all the money they invested in the convert back, they get 4% (if memory serves), on no money committed. They may not cover whatever the price of the stock is until redemption, then they convert at the conversion rate and deliver the stock against their short. Do not count on these guys to play "timing" with covering their short at a profit, right now they are very happy to collect the interest and use the money in another convert where they will repeat the same process. At least, that is the way I see it.
Zeev |
