RE:RE:RE:RE:RE:The Debentures Are A Great Idea[
"So trading at $56 for TGIB.DB, with a minimum block of $1,000, meaings you're paying $560 for a $1,000 debenture."
This still isn't adding up to me?? quote=theTransporter]But you can only order in 1000 blocks.
Each debenture's face value is $1,000 per unit. So trading at $56 for TGIB.DB, with a minimum block of $1,000, meaings you're paying $560 for a $1,000 debenture. That's immediate 78.6% almost guaranteed minimum upside, plus 10% annual interest on the $1,000 value for the ramainder of the term (1.5 years left). That works out to 105.4% ROI
minimum assuming you hold until maturity. This is
regardless of what the shareprice is at maturity.
Nice thing is if shareprice is higher than $0.45, you convert debentures to shares and in addition to the above ROI, you benefit on the appreciate of the value.
Of course as you said, the ROI potential (assuming this gets back up to $0.45 in 1.5 years) is greater by buying shares at the current price. Buying debenures just takes all the risk away and almost gurantees you the 105.4%. The only risk is the company not having the cash to service the debt upon maturity. Highly doubt these guys will not be profitable 1.5 years from now.
Like I said before, it's stupid for the company itself NOT to buy these heavily discounted debentures themselves!
I agree, those selling debentures this low must be extremely desperate perhaps having to use the funds to cover a margin call.
Wasteoftime12 wrote: It breaks down in 100. So 54/100*10 = 540. I did the math at if you converted today you would have shares at .26 I think it was. That's with no accrued interest. I can believe people are selling them that low. They must really need the cash.
XXX1XXX wrote: theTransporter wrote: Agreed. For anyone that scoops up the $560 debentures that are currently on the ask, that is a guaranteed minimum 96% ROI at maturity when you factor in the interest earnings. Even if this never goes above $0.20 again (highly unlikely), you walk away with 96% gains.
if anything, the company should be buying up these debenture themselves to significantly reduce their cost to service this debt, but principal and interest.
Please explain? I see them at $54.00-$55.00 ea, which I thought was on top of the $1000 per unit.
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