Triple 000 and Sub-penny Chart Plays

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As the price of the stock falls,
the lenders are entitled to more common shares
per dollar owed,
and the company quickly runs out
of Authorized Unissued shares.

This is only true for some convertibles, known as "toxic" or "death spiral" convertibles.

Big, grown-up companies issue convertibles with the conversion price set as of date of issue, and this problem is avoided.