Hi, Zeev,
Welcome aboard -- from a Valence bull. There is always a serious risk to investors in a stock to fall in love with it. I detect a certain amount of that here. People seem to react to unfavorable interpretations of Valence's circumstances as if their mothers, wives, sisters, and daughters had been scurrilously maligned. You (and gvander and others) have brought the antidote necessary for controlling this risk in your informative and gracious postings. Reasoned interpretations of the data available is always welcome to me regardless of the conclusions, and I believe it is so with many readers of this thread. Thanks for your efforts.
Now I would like to extend the convertible preferred discussion one more step with two questions. First, is it relevant to distinguish between short sellers who are interested only in the immediate profit opportunity, and short sellers who see it as a mechanism for grabbing control of a company at a low price? I ask because in these Valence circumstances I generally think Castle Creek may benefit more from a successful Valence than a failed Valence. If this is the case, I suppose a death-spiral attack would be less likely -- unless it is a device for capturing control of the company.
My second question goes to the matter of the resources necessary to execute the death-spiral strategy, regardless of intent. Since I assume that as a small investor I could engage in such a shorting strategy without any likelihood of triggering a death-spiral, I am wondering what the difference is between me and Castle Creek, except for financial resources. Do you have a sense of the (relative) resources necessary to undertake such a strategy successfully?
A small confession at this point: I have not had a chance to study your posts carefully, so I allow for the possibility that these questions have already been answered. Regardless of whether you reply to them now, though, I plan to study your posts carefully for the general lessons they offer.
Thanks again.
Regards, lws
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