How low?19 Jun 2019 12:04
Many of these larger sales, considered by many to be shorts, are not naked shorts they are covered shorts. If a hedge fund wishes to arbitrage an actual or firmly indicated position in a convertible, they will accept the income generated by the convertible, but to eliminate equity risk short all or possibly part of the equity risk by shorting the shares. This is common practice and happened last time when the original convertible was issued, it will take some time to resolve itself, though one might think we are in low ground as far as shorting the equity is concerned. This positioning is generally not related to company fundamentals.