OTCPK:CUUHF - Post by User
Comment by
rationalexuberanceon Nov 24, 2018 7:29pm
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Post# 29018161
RE:RE:Naked Shorting
RE:RE:Naked ShortingI would agree with you that debentures priced at $14.00 don't offer any advantage to debenture holders shorting the stock. If the price of the conversion was the same price as the share price, an investor could hedge his bet on the stock and benefit but the stock price would have to be much higher than $5.30 for that to happen.
It's been my experience that unless the shorts make up 5-6% of the outstanding shares, there isn't too much to worry about (SOX is currently at 2.63%). Also, they're on the hook to pay the dividends on the shares that they have shorted, which can be pretty expensive at the current dividend yield of 9.07%.