Andrew, I was just reading your post because it caught my eye, and haven't read the preceding ones, so I apologize if I get duplicative. I only wanted to point out that I am unaware of the terms of financing, but more than likely, your calculations may be off. Generally speaking, convertible debentures involve the conversions at discounts to market, otherwise, there is no incentive to provide financing. That is their "return" so to speak, rather than interest, and so more dilution will likely occur. PErhaps they get 10 percent discount to market. As an incentive to hold longer, they may get, lets say, 25 percent discount several months down the road. How much, we don't know. This has been my only concern since I bought the stock.
I own a stock in a small biotech that almost got destroyed from S-3 financing (commonly known as the "death spiral"), which I doubt is the financing with TSIG, but that financing caused the float to more than double. Not only were there massive discounts to market, but the financing group had a falling out with mgt. and went on a short selling binge before conversion, driving the stock down and then reducing their price per share even more and causing even more dilution.
Not trying to agree or disagree with anybody, but just pointing out that the financing could cause more dilution than you expect.
Regards,
PT |
