With impact of this "sweetheart Deal" and the fact the stock has rallied from $ 8.35 from May 7th to the high of 14.27 on Thursday---Pump and Dump the shareholders are in extreme risk of significant dilution-the premium paid on conversion-almost 30% should dilute the value of the stock to around $ 10 a share-----it may pop on Friday .15 to .20 cents the trend is definitely down
3. hedge funds will own the convert and short the common.....supply of shares rises just as demand from momentum players and traders declines
if ASKJs shares were more conservatively valued and there was some desperate need for $100 million, it would be a good thing. as it stands its dilutive and permits the management team to relax while they continue to take their own ridiculously generous options (dilutive to shareholders putting their own hard earned money on the line) and take them to the great American ATM for insiders........the stock market.
Anyway the convertible isn't nearly as important as the lofty valuation fed by the momentum players.
Momentum players will exit. The price will fall until it reaches a point where serious investors think it's worthwhile.....however it will take a while as there will be alot of short covering on the way down.