how can you assume this? For someone to do this they would need a broker that allowed this. Can you name one, any ONE broker that allows this without a massive cash reserve? I can't think of one and I been trading for a long time and have a little knowledge about off-shore dealings.
Is it possible? Yeah. Is it likely? Probably not. What broker would allow naked short selling a stock down 95% that just ran .001 to .017 within last month? What happens when they allow someone to short 1M worth of stock and it runs 100 bags? Who would want to take this kind of risk on any pink to make peanuts on commissions?
If they have converted shares they can't short, they'll simply be selling their longs. Even if they found somebody to allow them naked shorting what happens when company finds out note holder is short and rather than issue shares they pay them back in cash? By getting cash from another lender whose note won't mature for a year or two? No-one wants to set themselves up to get burned when they have a holy grail in making risk free money selling discounted shares at huge premium.
News 
Market Data 
Discover 
