Method wrote: It was a good bet. Thanks for keeping it professional.
I don't think the stock can ever do better than the debs until the old debs are gone. We'll see how the new debs trade. They should trade much closer to par given where FIRE is trading, significantly less debt and higher interest rate but I also wouldn't expect common holders not to have switched to the debentures before and those who still aren't doing it now. The arb is the short borrow. That's why the opportunity exists.
All that being said, I'm much more bullish on the equity now than before. Obviously this was a giant risk and even though they stole from debentureholders to get it done with only MMCap at the table, there is no question that the common benefited to the debenture holders detriment.
As for MM, I'm not sure what their net position is. They haven't filed again since 2019 which seems kind of crazy to me. Management won't confirm their position either so we won't know what their position is unless they file and they might be short a ton so their position may not be as big as people think at the end of the day.
They might very well see a path to profitability or at least a profitable acquistion by a third party. Certainly the SKUs are up a lot and there are a lot of sell outs on OCS but that could be incompetence on either side. Maybe MM was given up to date sales numbers so they felt more comfortable taking that much stock.
An operational update would be well timed when the first set of shares become freely traded. Everyone knew these converts needed to be refinanced but maybe they waited until they had good news.
We will find out soon.
johnale wrote: Ya IR - I am assuming finilizing deal part tho.
I also think I will concede the bet - as the debentures are inexplicably linked to the equity -
an investment in the debenture at 26 will forever beat the equity at 24.
although - if you look at it from the perspective of recouping our investment - (say we both needed the stock and debenture to go back to 1 to break even)(or any price really) then I think I win.
as for MCap taking all those shares - what do you think about that?
you think they see that path to profitability and took the shares knowing where fire was/is going?