DD Support Board and Research Team

[1manband]

its your belief that any company that has engaged in a toxic financing, by definition, is doomed either by the hand of the toxic instrument or otherwise, eventually. Meaning if a company is involved in toxic junk, thats a marker for sure failure one way or another

Yes, that is correct. I have followed an enormous number of toxic death spiral issuers and have yet to see one survive long-term. Even the few that are able to repurchase the debt, as they either end of issuing more later, go bankrupt, or just stop filing and are eventually revoked. If the Company is desperate enough to issue toxic death spirals, they are too far gone to survive.

Company management almost always knows EXACTLY what they are doing when they issue toxic death spirals. The claim that they don't understand what issuing them will mean to the Company is either BS, or the management is completely incompetent and is unqualified to run a public company. Same goes for the Board of Directors of the issuers and their professional consultants. Maybe one of the group is stupid and incompetent, but not all of them. No, issuers know EXACTLY what they are getting into when they issue floorless convertibles. And most do it for the same reason - to enrich themselves in a mortally wounded company and take whatever they can get from shareholders before the Company dies for good.