They have probably lost more on their longs than they made on their shorts, but are better off than just being long the equity. If the stock had gone up, they would have been a lot worse off than the equity holders, but still profitable. Therein lies the "hedge".
you said the Mark to Market on the shorts is $180 mm.
Mark to Market usually is used in the context of comparing to a cost basis. I'm not sure that the 90 million shares * current stock price really means anything in and of itself.
The funds that are short have a significant MTM gain on the short and a significant MTM loss on the bonds - therefore it has been an effective hedge for them and an effective A$$ F'kg for equity holders.
heatrate, get it through your dense skull, if you are trying to explain that most of the shorts are arbs either quote BOTH the convert and short amount MTM or NONE. you quoted the convert at face and the short at MTM, what the hell is that supposed to prove?
heatrate - I think it is a hell of alot higher than that.
In Jan 02 27 mm shorts were added at say $14. That is a $12 * 27mm = $324mm
In Feb 02 20 mm shorts were added at say $8. That is a $6 * 20mm = $120mm
In Mar 02 20 mm shorts were added at say $12.
That is a $10 * 20mm = $200mm
90 million shares x $2 = $180mm short. Some guy took exception to my saying that the amount short is only $180mm, since most of the shorts were initiated at prices much higher. That's irrelevant, since the long convert positions which the shorts are hedging were also established at much higher prices.