RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Cash flowPositive q4?? I should add anyone who decides to buy the convertible debentures in addition to their common shares actually reduces the amount of shorting and if investors were able to get the converts up to fair value, there would be tons of short covering from arbs along the way which might help the stock go up. It takes new capital though.
Method wrote: The borrow is really expensive. It's harder to borrow a penny stock and the borrow is often based on USD$1.00/share so it really adds up regardless of the rate but that is also high in this case. It's a lot of stock to hedge too per $ of face and most arbs will hedge the new convertible bond too. The four month hold stock is obviously the most expensive but there is a chance that gets much better once the first bit of stock gets issued. But that's speculative.
Arbs don't take a fundamental view on securities so they will short regardless if FIRE revenues are up 100% next year or not.
johnale wrote: "The arb is the short borrow. That's why the opportunity exists. "
why is the spread so much? It's like 36.5% difference - with the debs trading at 31 vs fire at 20?
(All in 12.71vs20)
everything should be finalized before September 1 as per the release. there isn't a huge time lag here.
thanks