Let me correct. The warrants, sold 500,000, has an initial conversion price of $3. The convertibles has an initial conversion price at $4.50.
So, basically, the bid buyers of the stock have been trying to under bid the convertible holders in the open market for cheap shares. They have been trying to get every single share under $3 from the hands of retail investors/traders under, who have been fooled by the "sudden" selloff. They though fading the stock was a good idea. Until it was not.