You are constantly a moving target. Fine, add the 1.5% interest rate of the last convertible round (2019) to your 5% cost of capital and you will get 6.5%. At the time the last round was issues, Halo was trading in the teens and the 5% capital gain would have come into play if the share price was in the 20’s. Otherwise, the total gain for the bond purchaser would have been a pathetic 1.5%. That was also a great sign of confidence.
Halo did go over the target price (20’s) last time and it will go over the $77 this time.
These convertible bond issuers are large institutions and do Warren Buffett type of research before issuing a large unsecured debt. They are not in the business of just making 0.25% return. Rest assured that $77 will be reached.
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