“Convertible deal with BofA- That was $2B of preferred stock at pretty much any given price at or below $18. If the stock drops to $6 that is then a “certain event” that will give BofA 3X the preferred shares at liquidation plus the ~7% interest on the convertible.”
THIS IS WRONG. HOW MANY TIMES DO I HAVE TO SAY IT? This deal is NOT a floorless convertible. If CFC’s stock goes to $6/share, BAC’s stake will still only convert into 16%-17% of the company’s common. Read the frickin’ 8-K! The “certain events” that would readjust the strike price are stock splits, stock dividends, additional issuance of options and warrants, etc. This is a STANDARD, plain vanilla convertible issue. Why can’t anyone seem to get this straight? I’m bearish on CFC too, but… wow… I’m absolutely baffled… this is public information… Why do I bother?
[File under: “I’ve Made Up My Mind – Don’t Confuse Me With The Facts”]
