Noteholders usually receive restricted stock that can't be sold for at least 6 months. This prevents a huge sell off of shares that could put the brakes on any big move in the pps. Hopefully Wednesday will be an example of how the company, by issuing restricted shares, will help free trading shareholders the chance to sell at higher prices. Plus, the company might be able to raise money by doing an offering at a higher pps. It also turns noteholders into mid to long term investors and supporters of the company. In addition, the larger noteholders have warrants and need the pps to increase so their warrants are in the money and not underwater. Don't forget the company can at anytime use cash to pay off the notes, decreasing dilution and interest expenses. But, we need all the cash we can get to fund operations, especially the double digit rise in revenues that could help a significant increase in the pps. Most of the converts that are happening now are for goods and services by individuals or companies that are not speculators and sell their stock, if unrestricted, to pay for the costs of what they provided. As far as noteholders being loan sharks, its a free market. The company borrowed at the best terms possible given the situation at the time. They had to agree to the terms. There were no threats of broken legs as with loan sharks. The lenders took big risks justifying high returns. There is a saying that its not the return "on" capital, but the return "of" capital. The noteholders would be left with toilet paper if the company went belly up. Be thankful there was somebody there to keep us breathing and allowing all current shareholders the opportunity to make some money.
News 
Market Data 
Discover 
AI
