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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (73777)	9/5/2012 10:46:57 PM
From: tyc:>	Read Replies (2) \| Respond to of 78413

In this difficult environment LSG raised $100M capital by selling a convertible debenture. What was it that caused financiers to be willing to invest so much ONLY by way of Convertible Debenture ? The CV market is dominated by hedgers. They are attracted by the possibility of hedging against a decline in price. And, they seek profits NOT from the usual upside movement of price but by repeatably shorting the common stock on strength and covering their short on subsequent weakness. Their shorting may well stifle any upside move, but their buy-back on weakness will support the stock against a decline. Repeatedly selling on strength and buying on weakness ......selling high and buying low.... might significantly enhance the 6.25% yield of the debenture. It can also provide a perfect riskless hedge no matter where the stock price goes. (shorting at less than $1 is not permitted).. The debenture start date is September 7th. I'm ready to play their game. If you can't beat 'em join 'em. I do not expect to gain from a upside movement of prices, but the total return could be satisfying.