InvestorsHub Logo

Arthur

08/06/13 3:59 PM

#50909 RE: Bjones2 #50907

Yes, Convertible Debentures are known as Toxic Financing, and the companies that offer CDs are lenders of last resort.

CDs cause stock dilution, which cause the share price to drop, which will cause more dilution because the CDs are then converted at a discount off the new, lower price. Such death spiral financing is also known to scare away (wise) shareholders.

I'm glad you acknowledge these basic financial facts, at long last.