Inseego Corp (INSG)

[jessellivermore]

Nick...

Please forgive me for jumping in on this..I'm pretty sure Slim (my old buddy would agree)..

The knee jerk to this announcement is "Well Its more debt or a potential dilution...but actually it is a very good move by the CEO...Right now INSG is a guns a blazing as far a new accounts..But even though their revenues are increasing their earnings on a PPS are not..

Diagnosis...They are spending too much money...and they have one note they are currently servicing which is over 9%...With bonds trading at close to zero percent..9% is loan shark rates...So What the company is doing is borrowing at 3.25% and paying off a 9.6% loan and that is similar to a "carry trade" and the best one I can ever remember..The rise of PPS to $15 (temporarily) allowed the company to get 12 dollar plus conversion rate in the note to common stock..That is great...If they just floated a secondary they probably would have only been able to get $10/ share...What they got is not malignant dilution...And they can force conversion which they have in the past..

I believe the market will quickly understand the Convertible is the medicine the company needs to lower the cost of debt and improve the earnings..With the revenues looking great we should be heading for above $15 very soon...

JMO...":>) JL