I still want YLO to go DOWN DOWN DOWN!
However, that may be a wishful thinking since I see the price of bond side is stabilizing. (<--95% of time stock price is close to bottom or already bottoming)
I won't regret if it never reaches the final ~$1 ranges because still bought some position before yesterday at great price =)
they just have to sign a confidential agreement..not to cheat that's all =)
But, yes they do buy @ market price & redeem @ face value...<--refer to my new thread.
-->Those insider buying activity still can't distinguish between insider & company =)
Here is link, perhaps you can tell me what that means because it looks like to me, on June 28th, YLO bought back/redeemed 5,248 units of preferred A for a total of $104486.24 which works out to $19.91 a unit and has been performing these buybacks/redemptions for quite some time according to the NCIB they filed and had approved.
YLO.PR.A 5,248 104,486.24
YLO.PR.B 3,134 42,938.66
YLO.PR.C 3,068 42,018.76
YLO.PR.D 1,300 17,875.00
Leo, you are making something trivial unnecessarily complicated. Stop talking about Person A and Person B. They have nothing to do with this transaction.
YLO is *buying* back its own debt on the secondary market. YLO is the *buyer*. YLO ends up owning its own debt. YLO can at the moment it owns the debt simply cancel it. It isn't different than buying back common shares and cancelling them except for tax implications.
From the May 11 PR:
Under its normal course issuer bids, Yellow Media Inc. intends to purchase for cancellation up to but not more than 51,782,537 of its outstanding common shares, 1,127,882 of its outstanding first preferred shares, series 1, 684,028 of its outstanding first preferred shares, series 2, 830,000 of its outstanding first preferred shares, series 3 and 500,000 of its outstanding first preferred shares, series 5, representing 10% of the public float of the common shares and of each such series of first preferred shares outstanding on May 5, 2011....
Over the twelve month period ending May 5, 2011, Yellow Media Inc. had acquired 509,460 first preferred shares, series 1 and 359,716 first preferred shares, series 2 by means of open market transactions, at a weighted average price of $24.82 and $21.31, respectively.
Leo, your example is a mortgage is sold by bank to some other person. In that case of course you are right that the mortgage is still for $500K par, and the homeowner still owes the full par value of debt.
That wasn't his example. His example would be that the homeowner goes to the bank and offers to buy back their mortgage for $400K. If the bank agrees the homeowner ends up owning a mortgage on which he is the borrower. Of course in that case the homeowner can cancel the debt.
Original poster was saying that YLO was buying its own debt on the secondary market. In such a case YLO can cancel that debt. Companies do this all the time.
I did not validate whether original poster's facts are correct. I don't know if YLO bought back any debt.