TSX:SOT.DB - Post by User
Comment by
Malpeque2on Oct 25, 2022 12:24pm
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Post# 35046994
RE:THE SQUEEZE IS ON!!!!!!!!!!!!!!!
RE:THE SQUEEZE IS ON!!!!!!!!!!!!!!!Don't think so. The company is going to "run the process" of the strategic alternatives. I think most of those "shorts" are institutional type investors who already hold the converts and they short the common as a hedge.
If you look at the stock chart, the Private Placement of common shares issuance prices, and the price and yield on the converts over the years, it has been all Downhill, so buying the converts and shorting the common has beena pretty safe place to be. The only ones making money besides this strategy are the Welch Bros on their "management" agreement.
With Armoyen the game has changed slightly for the common, but the converts are protected on the upside to their shorts by the conversion feature, and on the downside all the way to NK if things got really bad, then they would be next in line for a haircut. They are first in line in the debt stack to not get a full recovery.