Here is my prior post edited to meet guidelines:
“However, it appears they were trying to get the convertible bond holders to change to preferred shares that also were convertible to common stock at $6.50 a share. Since the bonds may have been convertible at $5.85 a share, and in any event are due to be paid out in full on March 31, 2021, I don't know how much actual conversion to preferred shares took place. But even if it was successful, the bondholders were offered boatloads of preferred converts and warrants for more common shares as well.
Which is my point all along -- there is a tremendous overhang of warrants and converts to common stock in the $5.85 to $6.50 range, and these parties may well have already sold these shares short into the market at prices between $8 and $10. If so, these short sales and short positions can never be "squeezed", as some parties elsewhere are advocating. The holders will simply convert to cover.
It would take at least half a day of research into all the KemPharm SEC filings for the past four months related to the capital raise and the restructuring in order to get a better handle on all this. Since I do not plan on investing in this company, I will not be doing it. I recommend that anyone who is planning on investing do the work -- do their own due diligence -- because some of the quantities are frightening.
I am not saying that the company cannot be a success (although their business model is a strange one), I just don't think any pops in the stock on FDA approval will be very sustainable.
