RE:RE:someone correct meThe smart investor is the company buying back their debs.
The DB.V is selling at a premium to the DB.U and shares. If DB.V goes above par, then that means the conversion option becomes profitable, which means that the shares are above the conversion price of US 13c (~CDN 17c). Going from 12c to 17c (41% gain) is a bigger percent gain than going from DB.V $88 to $105 (19% gain). Waiting 4 years at 6% interest can make up the difference though, but only if the company doesn't call your debs back at par).
IMO the shares are currently a better value buy than the debs if you have the outlook that the company will continue to do well.
The DB.V is better if the company does badly but you still lose money if that happens. I think most people here are buying because they think the company will do well. A premium is paid for that extra downside security at current prices.
If the company does really well, all the remaining debs will end up converting. For the same dollar investment, converting DB.U gets you more shares than converting DB.V. And currently buying straight shares gets you more shares than converting either DB.U or DB.V
Plus you would be helping the company if you don't compete with the company to buy back debs. Large investors with both shares and debs would help the company if they let the company buy their debs instead of converting them. That way there would be less dilution and their shares would have greater value.
Method wrote: I think "smart" investors are also buying the GCM.DB.V, which hit a 52-week high today.