Post by
Papertiger73 on Jul 22, 2020 1:39pm
BAM Conversion
Hi,
How much do you thik the BAM conversion will act as a ceiling to the stock price?
Given that the CAD value of the conversion fluctuates with the exchange rate (exchange rate price is $8.67 USD - if I am reading the documentation correctly).
Currently the stock is trading at the conversion price in CAD.
Will the share price continue to increase to drive down the yield? - Currently at 6.13% or will the conversion hold back the price since buyers would know if they run the price up too high then BAM could short the stock then convert Prefferreds to common to cover their position.
BAM tends to be a buy and hold company and not here for a quick flip, but on the other hand, if their profitability is threatened they might start adding new strategies to thier repitoire.
Thanks
Comment by
Roxy27 on Jul 27, 2020 12:18pm
I can't see a scenario where BAM shorts the stock. If it's not a specific covenant , it certainly is materially counter to the stated goal of the investment.