Viewing a single comment thread. View all comments

paulc19802 t1_jegmq6d wrote

Share price after conversion will be (based on values at close):

Conversion price = total market cap ÷ total shares outstanding.

New price = conversion price x 10.

Obviously that completely depends on prices at close on the last trading day before it happens. But if they remain similar I'd expect a conversation price between $2 to $3.

Then the "new" stock to get hammered by dilution following RS.

So yeah those strikes make sense. Can't really argue with that.

I'm currently long preferred shares but I'll be getting out of dodge before it actually converts.

I'd be careful with Puts though especially shorter dated expiries. Don't underestimate people's stupidity to fomo buy after the RS.

20

ImFedUpWithItAll t1_jeh3933 wrote

There is gonna be a major pump after the RS as the number of shares will make pumping viable again.

After that it'll drop like a stone in the dump phase again.

−5