Craig,
<<<I think that there is also the possibility that they can just convert to cover their short position, and won't actually have to buy back on the open market.>>>
When the RegD guys shorted, they shorted against 'box', meaning they have the same amount of shares already in possession. In order to cover, they have to buy back in the open market. Or, they can just leave it and never buy back. This kind of 'straddle' is very common in the comodity market. But, then again, if they are limited to a percentage of ownership (5-8%), I'm not sure if these 'special short/long' shares are counted, probably not. There will be a conversion window for them to sell and convert at the same time and still keep the same percentage of ownership and yet pocket a big difference in price. For example, let's say Ancor goes up to $3 within the next two weeks, they can sell at $3 and convert at $1. If they wait past 17 days(?), then they have to pay $3 to convert also. They may hold only if they know Ancor will go much higher than $3 later.
You can make up your own scenario.
KJ |
