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Q: it seems the fortunes of this company are at least stabilizing if not turning around. They are profitable and have negotiated a more favourable debt maturity structure. My main question is in regards to the short interest of around 18% - is this not a risky thing to do in light of the above? I read somewhere the short positions have actually been established as hedges by convertible bondholders - if the company tanks, the bonds sink but the short positions offset. If the company succeeds and share price increases, the convertible bonds can convert to equity at the lower conversion rate and close out their short position. Am I on the right track? I can't otherwise explain this huge short %
Read Answer Asked by Neelesh on November 29, 2022
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