First time poster, long time reader of the board. First, thanks to all who share their time, energy and knowledge on this board. It is very helpful. And also a big hat tip to Allan and his blog for all of his work on this stock.
As background, I am pretty heavy long from between $0.53 and $0.85 a share, in both taxable accts and various IRAs. I am also a full time trader but I don't trade this stock. This is a wealth builder for me.
For those who saw the $10 price on the Preferred, you should know that Preferreds usually have a conversion rate into regular stock at multiples, not 1:1. So in this case, using their more simple formula (yest VWAP * 0.88 (which is cute given the name of the investor) - let's say that yesterdays VWAP is $2.20 (it isn't I am just using as an example). Multiply that price by 0.88 and you get $1.94 a share. So in this case, they could convert one share of the Preferred into just over 5 shares of NNVC. If the VWAP goes down, they get a better multiple, if it goes up they get a lesser multiple.
It is just an example, but it should help clarify. Also note that these guys are getting a 10% "dividend" of shares so that is additional shares they get from the deal.
One point I want to make about the various exchanges. I have traded them all and I can tell you from experience the AMEX is not an exchange you want if you want to limit the Market Maker games that go on. In my experience the AMEX has big spreads and often bad fills. The Nasdaq is an electronic exchange so most of that market maker garbage is toned down. Not to say they can't play games with the computers (they do) but personally, I would much rather see us on the Nas than the AMEX.
Again thanks to all for your insight and knowledge here!
- Mikey
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