I just performed some cursory research on a company and found a floorless convertible.
I posted this:
The company issued a floorless convertible last year.
This has meant the death spiral of many small companies.
NOTE 11 - CONVERTIBLE DEBENTURES
On August 17, 2004, the Company closed a Convertible Debenture offering with four select institutional accredited investors for $15,000,000. The Company received $5,000,000 upon closing and $10,000,000 was placed in a Custodian Account to secure payments for the debentures. The bonds are convertible into the Company's common stock at a conversion price of $1.67 at any time through the maturity date of August 17, 2007. Also, the bonds bear interest at a rate of 6% payable quarterly on September 30th, December 31st, March 31st and June 30th. There are 3,453,944 warrants for the Company's common stock attached to this agreement at a value of $3,824,200. The Company has recorded a Debt Discount against this debenture in the amount of $6,364,063 and amortized it through September 30, 2004, $265,169. The remaining balance will be amortized over the next 34 1/2 months.
I don't understand the reason for the recent price hike unless the floorless convertible holders are excersizing their options in preparation for shorting them.
My question is:
If someone has options to buy a theoretical 10mm shares of stock and excersizes the options, isn't that the same as buying?
IOW, it seems to me it would appear that someone in the know was accumulating even though they were just excersizing options they paid $1.67 for @ $5.00+ per share.
How would the excersizing of the options affect the share price?
Market Data 
Markets 
AI
