Now we are ready for another recap.
Some of the readers on the thread are probably wondering what all this is about. I think this is about the intent of Castle Creek in investing in Valence.
Larry, you've been telling us Castle Creek can't lose, even if Valence collapses. Over the last 5-6 months, you've constructed an elaborate conspiracy theory where CC had converted some preferred shares, and has shorted enough shares to hedge their remaining Series A preferred shares. You say they will use the variable conversion privilege on the B shares to avoid losses if Valence falls. In summary, you say that Castle Creek did not invest in Valence expecting them to succeed, and they plan to make money whether Valence succeeds or fails.
But now the SEC filings and short interest reports aren't quite matching up with your theory. Today you refused to believe that Castle Creek had not converted any preferred shares, although it was said repeatedly in the filings. You couldn't "see it" because it didn't fit with the theories you have espoused on this thread.
Although it is still uncertain whether Castle Creek has shorted shares and if so how many shares they have shorted, it is apparent that they still have a substantial amount of money "at risk". I believe that Castle Creek has shorted less than 300,000 shares as a hedge, if any, and thus the bulk of the $15M they have invested in Valence is still at risk.
We will find out more when the next short interest report is released. If your theory, and Zeev's assertion today that they may already shorted to hedge half the preferred B position, are correct, then the next short interest report should show an increase in open short position of over 600,000 shares.
Your theories are starting to unravel.
Paul |
