Floorless Preferred Stock/Debenture Message Board

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Strategies & Market Trends : Floorless Preferred Stock/Debenture

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To: TH who wrote (432)	6/4/1999 7:11:00 PM
From: RockyBalboa	Read Replies (1) of 1438

You mentioned that the investor can convert the debenture at a small discount and the average of five day closing bid. As well that it is floorless. I haven't read through it in full, but he can convert parts of the debenture. So by selling many shares of the stock in short time, the price of the common stock does suffer (I don't call that manipulation), but selling a few 100k shares can depress a stock price. THe process of selling stock and converting debentures can last for months, if not years. Doing so, he would achieve a certain selling average price and then, when the average bid price (as described) is low enough, he notifies the company that he wishes to convert and can close out his position. Look for phrases líke "the average of the lowest bids within 5,... trading days". Sometimes even directors of a company are within an entity who takes part in financing with convertibles.

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