InvestorsHub Logo
Followers 38
Posts 1877
Boards Moderated 0
Alias Born 01/08/2014

Re: None

Friday, 01/09/2015 10:01:43 PM

Friday, January 09, 2015 10:01:43 PM

Post# of 87250
I think some do not understand the mechanism of notes and conversion, or I am missing something myself.
To make things simple:

Entity A lends money to entity B with let us say 10% interest.
Entity B is a company like ECIG. Entity A is a private firm or rich individual or you name it whatever you want.

Entity B can pay back with cash or with shares to entity A.

Entity B choose to pay with shares, and promises @ discount pps based on volume averages.
The discount is advantageous only if entity A chooses to hold its shares of B. Because for an amount of money X, entity A can get more shares than me with the same amount of money X. Plus, the lower the pps of B, the more shares of entity B entity entity A can get in payment. Here is the catch. If entity A chooses not to hold it shares, it will claim as many shares as needed to recoup his investment plus interest. In this scenario the pps of entity B does not matter to entity A. All it needs is as many shares as sufficient to dump in market to recoup his initial X investment + interest. Therefore if Entity A does not want to hold shares of entity B, it has no interest shorting/bringing down the pps of A.

long and strong ECIG
Join InvestorsHub

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.