This is for rheeman to read so that he can fully grasp the concept of a convertible debenture....
>>>>>>>These securities have a feature that allows the holder to convert his/her security into common stock at a discount to the prevailing market, no matter how low the market goes. Therefore, no matter how low the price goes, until the conversion is completed, there is always the possibility someone owns the stock at a discount to the market and can sell at a profit.
These kinds of financing instruments are commonly known as "toxic financing" or "death spirals”, due to the fact that the stock continues spiraling down as holders convert and sell. The problem is further exacerbated because as the stock goes lower, the company must continually issue more shares for each conversion. <<<<<
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