RE:RE:RE:RE:RE:Another 13,000 shares!!Good question Socrates. Here's how I think the trade balances risk and reward.
Debentures purchased:
SEP-2023, $10,000 @ $86.50 = 11.6 debentures ($1,000 FV) @ ~263 shares/$1,000
NOV-2023, $11,000 @ $85.00 = 12.9 debentures ($1,000 FV) @ ~263 shares/$1,000
TOTAL Shares on conversion = 24.5 debentures @ 263 shares each = ~6,445 shares
Interest on FV @ 6% semi-annual. Held to maturity = ~$1,500/year for 3 years = $4,500. Interest effectively reduces the cost to $16,500 for 6,445 shares = $2.56/share
If the share price fails to exceed the conversion price of $3.80/share by 31-OCT-2026, the debentures will return principal of $24,500 and will have paid interst of ~$4,500, a total return of ~$29,000 - a profit of $8,000 on the inital $21,000 investment. The ability of QTRH to pay interest is 99.9% imo, and the ability to redeem the debenture is very high, making it a low risk investment.
For comparision, $21,000 would have bought ~13,260 shares, based on the days' closing prices. If the share price is $3.80 on 31-OCT-2026, the shares would be worth $50,388 and a capital gain of $29,388, of which 50% would be taxable at the marginal rate.
Since I've never bought a debenture, am I missing something - the trade doesn't make sense if you beleive the share price will equal or exceed $3.80 by the time that the debentures mature on 31-OCT-2026.