15 M shares float, 36 M shares short !!!!! How are they going to cover !!! GTAT will follow SPWR from $4.00 to $8.00 pps in couple days !! GLTA longs. Hold on your shares. Longs are here for dollars gain not penny flipper.
Most of them don't need to cover.
You know about the ~$220M bonds deal, right. Those convert into up to 28.5M additional shares.
"The amount of stock depends on the price at the time, but if you were doing this last Friday, you would have received almost 130 shares for $1,000, which works out to about $7.71 a share.
Some $205 million of those bonds will go out to the general public, but underwriters have the option to purchase some $15 million, which they did last week. So the total amount will be closer available will be $220 million.
GTAT is issuing about 28.5 million warrants - stock options, if you will, with an exercise price that is about 67.5 percent higher than the closing price of the stock on Sept. 24, was $5.93."
It is common practice to hold the common stock short when you are also holding convertible bonds (not necessarily for the full amount, but at least enough to get some protection in case company goes under before the bonds mature, in this case in 2017).
Anyone who did this when they were issued made a paper profit on the way down, and in any event could only lose limited funds in case something drives GTAT up - since the bonds convert at a fixed $7.71/shr. Not that $7+ price levels are even relevant for GTAT at this point.
So why would they be in any hurry to cover?
FYI, I think GTAT got a great deal on those bonds. 3% interest and conversion at $7.71/shr is pretty good given how things are looking right now.
I'd say GTAT got a truly awesome deal.....at 3% interest it pays only $6.6 million a year for $220 million of borrowed cash. Given the revenues GT has shown it's capable of generating, that's really just pocket change for a lot of financial oomph. And the conversion price is quite reasonable.
I like the action today but where do you come up with your thesis?
Is it because you recently laid down money in this $3 area or is it simply SPWR doubled so GTAT will also?
SPWR still trades below tangible book value, GTAT trades below book value but is no where near tangible book which was last reported at about $1.83 making GTAT's Price to tangible book value 1.73 as I type.
Let's see what they say when they report. I think it will be a step in the right direction IF things have not gotten any worse since they spoke on 12/18/12.
If things are worse the stock may take out its recent lows.