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Exelixis, Inc. Message Board

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  • mruyog mruyog Jan 21, 2013 12:18 PM Flag

    Anybody can speculate

    I am not sure institutions that are offered common shares alongwith convertibles in a company financing deal are allowed to short their common holding. Also, I am not sure the same institution which is a part of the financing deal and independently owns common shares can short its independently held common shares to transfer the profits to convertibles! There are restrictions doing this per securities regulations and contract conditions. Somebody on this board comes up with this "brilliant" idea the shorting concept for explaining why Exel shares are rangebound now and why it has 28% of the float shorted; but, those who know what restrictions these deals incorporate would be laughing at this superficial (perhaps, stupid) argument!!!

    I ask readers of posts on this board to be judicious to whatever is posted on this board by so-called self-appointed pundits.

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    • "I am not sure institutions that are offered common shares along with convertibles in a company financing deal........." The convertible did not come with a common stock or warrant sweetener attached. The convert and equity offerings were done simultaneously, but they were not linked. Participants in one were not required to participate in the other. "........are allowed to short their common holding." The only restriction on equity offering participants is that they cannot short into the offering. Once the offering is completed that restriction is removed. Convert participants who short below the conversion price open themselves up to a potential capital loss if the stock is subsequently put to them at the conversion price. ".... is posted on this board by so-called self-appointed pundits." Misinformation comes in all shapes and sizes.

 
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