InterDigital Inc (IDCC)

[Gamco]

Vegas Options - The bond holders at maturity get credit for the same dollar amount as common stock holders got paid in dividends. Example: a $1,000 bond received $35 interest annually plus credit for that years dividend paid at maturity. Conversion rate per $1,000 bond is stated to be 12.9041 shares, so bond holders receive credit or $18.06574 (12.9041 shares × $1.40 annual dividend). Assuming the dividend rate per year remains constant at $1.40, the annual return for a $1,000 bond would be $35 interest paid currently plus $18.07 paid at maturity or a dollar return equal to $53.07 annually.
Those bond holders also have the leverage of the sliding conversion rate which is capped at 130% of the initial stated conversion rate in the bond indenture. That leverage diminishes at the stock approaches $101. The bonds then should theoretically trade at par.
All just my humble opinion.