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twitter would like to borrow money from you. they will pay a reduced interest rate on the loan. in exchange, you will get the option to convert your loan into s
by jonmcauliffe 12y ago
twitter would like to borrow money from you. they will pay a reduced interest rate on the loan. in exchange, you will get the option to convert your loan into shares of twitter at a designated, unchanging price--likely near the current stock price.
this is a great deal for twitter, as long as their stock price does not go up. in other words, twitter is calling the top of the market for its own shares -- to the tune of 1.3B.
bezos did this to great effect with amazon in the late 90s. he did in fact correctly predict a prolonged stagnation in share price.
- howlin 12y agoOf course, the share price stagnation is a bit of a self-fulfilling prophecy. If the share price rises too much, bond holders will convert and cash out early. Even the understanding that this is possible puts a damper on peoples' assessment of the stock's upside potential.