Convertible Question
How does an out of the money convertible note that is due soon, and the issue of dilution cause issues for a company?
Any examples off hand of this?
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Well if the noteholders aren't going to be converted into equity holders, the company is going to have to pay back the principal at maturity. In this case, it would not dilute existing equity holders. If it's in-the-money and economically beneficial for the holders, they will convert into equity and dilute existing owners.
Thanks
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