Do you think low 50's is a good investment
if you think low 50's is a good investment I 100% disagree
Clearday has so many toxic financings on their balance sheet that they can not afford the debt payments which means the debt will convert to common stock.
For example the last toxic financing they did was for $172,000 at 22% interest.
if they do not make the monthly payment on that one loan alone, the debt converts to stock at a 25% discount to market.
That means every month the debt holder will get shares equal to 5% of the debt at a 25% discount to market. The debt holder can sell those shares on the open market at a lower price than the market, and still make money.
The issuance of shares will continue because Clearday doesn;t have the money to make the debt payments. CLRD stock will be 1 penny by the end of the year.
If you think this so called SPAC is going to work out you are delusional because the SPAC shareholders are not going to accept a deal with Clearday because Clearday management doesn't know how to run a profitable business. The other reason the deal is unlikely to close is because the SPAC company, upon closing, will have to pay all the debt that Clearday has.
If by some crazy reason I am wrong and the deal gets closed, CLRD shareholders are probably going to get about 5% of the new public company. So that means if you own 1,000 shares of CLRD, you will probably end up owning 50 shares of the new public company. The 5% is a guess because I had to come up with a number, but I can not see CLRD shareholders getting more than that.
But a closing is very unlikely because Clearday's last 10Q was so bad I am not sure how they are staying in business.
The balance sheet had ZERO in cash.
$58 million in debt.
They lost $105 million for first 9-months of last year.
I don't even know how many toxic loans they have and we all know that drives a stock to 001 a share once the conversions start happening.
So if you think 50's is good, I would agree with you. it's good to short because it is guaranteed to go to 001.
But I guess logic and smart investing is out the door.
