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The creditor's shorting will walk this down slowly (if they're smart) over the next two months to try to maximize their profits and also maximize the number of shares that they receive.Unfortunately a number of stupid retail investors will buy shares as it's falling and lose money as it gets stepped down.Bottom should be at 2-3 cents when the final conversion shares are issued.p.s. I would hope that it opens below a dime on Tuesday. Why help the creditors short more shares at a higher price?
WestCoast, IMO, the 2011 creditors have no interest in walking this down. It is in their best interest with this deal to keep the company in business and to be able to sell the converted shares.They will NOT hold any common shares. Keep that in mind. They will sell as soon as they can. They just want their money out with as much profit or minimum loss as they can.The 2011 lenders will not sell short YET. They have no shares to cover with until the shares are authorized at a shareholder meeting.The 2009 lenders are another story. They have their shares in their hands right now. They will sell immediately because their shares will be GONE in a bankruptcy. Look for selling a lot next week.
I'm still amazed that anyone is buying as it falls.
You're 100% correct.