if the debt holders convert at .0001 or below and try to sell the enormous number of shares they would have converted their debt into the stock would go to no bid as it has in the past
think about how many shares would be redeemed
a $10k debt holder would convert into 100 million shares; how much can you whack that bid @ .0001 before you destroy the market
per the 10q filed for 9/30/11 there are potentially 42.7 billion shares that could be converted based on the debt; obviously with only 3 billion authorized not all the debt can be converted but i'd be willing to make a bet that what we're seeing over the past month or so with the heavy volume on the sell side is someone converting debt to stock (either at .0001 or below) and then immediately selling it to get out. if i were a debt holder i'd be doing just that, why risk the company not being able to repay the debt (which they have shown that they can't) when you can cash out right away
the old bird in the hand proverb
time will tell how much is being converted when the 10k gets filed
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