Roger, actually, CTXS convertible is a master piece of good finances (on the part of the CFO not the buyers of the paper), it is as good as the the old CYRX, CYMI and few other convertibles. Priced at a valuation of close to 12-15 times book value, no interest paid until conversion (namely even the interest will be eventually paid with stock), that is essentially free money. They can go an acquire some struggling company for expensive shares (one of the reasons for the increase of authorized shares) and have the cash to turn such outfits around. I would call this financial deal a victory for the company.
Is it a good short? Well, if it breaks $75, it is a better short than here, IMHO, in any event, I think that during the next two weeks there will probably be another opportunity to short it above $82 again. I think that "overvaluation" itself is not always a good reason for shorting, for a good short, you want a company in trouble which is over priced, they are not in trouble and a lot of money is flowing their way every time the stock drops 10%-20%.
Zeev |
