Q: This is a tiny company that may be on the mend. Today they issued a news release of a plan to exchange approximately $890,000 of certain existing debt for up to 2,690,531 common shares of the company.
The conversion price of the shares is 29 cents.
The current share price is under 21 cents cents a share. Is it peculiar that the conversion price is higher than the current price? Does it indicate the debt holders regard the company shares as undervalued or is this just a way to keep the cost base high and minimize cap gains on any future sale?
The conversion price of the shares is 29 cents.
The current share price is under 21 cents cents a share. Is it peculiar that the conversion price is higher than the current price? Does it indicate the debt holders regard the company shares as undervalued or is this just a way to keep the cost base high and minimize cap gains on any future sale?