LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

Short position

[bossu]

Dificult to figure the increase in the LSG short position: -Fev 15 8,892,000 -Fev 29 11 627,000 Another factor to consider: Since the infamous day when Tony betrayed all of us,there have been 300 ,000 000 shares that have changed hand out of the 463 000 000 shares issued.The controling interest mush have been buying and d'ont think that some big pockets has been buying in the hope of a better offer. Even If we say NO to the deal ,I think this is a lost case! D'ont you not think so ?

[Bean_and_Dunn]

The increase in the short position is very easy to understand. $103 million of convertible debentures are outstanding. These debentures are "in the money" They can be converted into common stock at any time. In a very short time period conversion to common stock can be forced upon the debenture holders. People who have bought the debentures can sell the common shares short, and lock in a

[bigdaddycash]

it is not clear to me what the actual conversion clause is: a) the weighted average price needs to be at least $1.82 on each of the individual 20 consecutive days; or, b)  the weighted average of all trades in 20 consecutives days needs to be at least $1.82 (e.g. some days may not have a high above $1.82 but higher volumes of trades in excess of $1.82 could cause the weighted average over 20

[Shlinker_]

yep, i think you got it at (b). weighted volume to price for 20 days.

[Bean_and_Dunn]

I agree with Shlinker and just to clarify if 10 million sold at $2.00 and only 1 million sold at $1.60 your weighted average price would be $1.96. You will also notice the wording of the dates in the conversion clause. It is very scary. 

[bigdaddycash]

exactly, if the clasue is as you interpret then the shares could only trade above $1.82 for a single day then be called - for example if say 100 traded per day on days 1-19 at $1.50 then on day 20 10,000 traded at $1.90 then the 20 days clause would be fulfilled because the weighted average price would be $1.8361!  crazy!!  how does one keep track of this? 

[Bean_and_Dunn]

Follow up on the conversion clause. If you divide the debentures by the original conversion terms you wind up with 740 shares. If you wait for a forced conversion at 95% of the current market price (assumed to be $1.82) you wind up with 521 shares. You would kind of loose a lot of money by not converting,  Time to smell the coffee!

[BrahmaViddo]

The debentures were a driving force to sell you longs out to the first bidder. In this case a their world silver miner. Tony wipes out the debentures for cheap by selling out LSG. So LSG doesn't spend money buying them back instead they force convert