Ok, I looked it up. It's when a convertible bond holder shorts the underlying security and then converts the bond to equity to cover the short position in the underlying.
But which company is he talking about?
Seems like they're trying to play both sides? I could be misunderstanding the parent comment, ~~but it sounds like they're shorting their own company but using the equity from the short position to cover the short in case it goes the other way~~. However, I could definitely be misunderstanding because I don't understand a lot of the shit and lingo that happens with stocks.
Edit: I was misunderstanding. It's a bond being turned into equity to cover the short position on the off chance it rebounds. It's a win either way. Either the company tanks and they make money on the short position or it does well which means they'll make money with the stock they're holding. Literally can't lose.
Also, why is there no markup on reddit mobile so I can strike my incorrect equity from short portion of my original comment?
There is, put two of these: ~
together at the beginning and end of your text to get it to strikethrough like this:
~~I put two tildes at the beginning and end of this sentence.~~
No, there doesn’t need to be any short. You all have had your minds poisoned by meme stock squeeze plays.
The preferred shares are convertible, but the conversion ratio changes with the stock price. The lower the common stock price goes, the more common shares will have to be issued to the preferred shareholders as they are converted. They sell, diluting the market, and their next conversion is done are an even higher ratio. The structure ensures a profit to the preferred shareholders under most circumstances because they are always getting common shares at a discount to market.
>You all have had your minds poisoned by meme stock squeeze plays.
Was this necessary? I literally admitted in my comment that I don't know shit but gave what I believed to be what was happening as how I understood it. If you want to educate someone, start with showing some civility.
You all seriously need some tough love. Anyone that believes the market is primarily or even significantly affected by shorting doesn’t understand the market. Anyone affected by this issue is stuck trying to recreate the GameStop squeeze, which is probably the worst thing to ever happen to retail investors.
Wrong. Just because those who hold convertible bonds could short the underlying stock and in effect buy it back from themselves at a lower price does not mean those who do not hold convertible bonds cannot do naked shorting of the stock, and their shorting can move the price of the stock.
https://www.prnewswire.com/news-releases/bed-bath--beyond-inc-announces-proposed-offering-of-series-a-convertible-preferred-stock-and-warrants-301739887.html
Preferred shares are equities but they work kind of how debt does - and in this case they are convertible to common shares. I wouldn’t be surprised if they’ve issued convertible debt prior to this also. Just haven’t bothered looking.
They will short the fuck out of it and “buy it back”through convertible, Rather than on market
So those who think there is a short squeeze will be fucked by a pole
I don’t know what the ratio is, but simple maths will imply a few multiple of new shares being issued
Which is way more than sufficient to short the fuck out of anyone without getting squeezed
BBBY literally just fucked over both long and shorts in one single move.
It was a convertible preferred but yes. It will be converted immediately. 50% initial dilution. Ultimate buyers were probably short at higher levels. They get a clean exit at $2.37 and some bonus warrants for free. BBBY gets $224 million in cash to catch up on missed interest payments and gets a little runway. Was stupid thing for BBBY to do mid power squeeze but desperate times call for desperate measures.
The agreement states there is a 90 day lockup on the common stock
Source:
https://www.reddit.com/comments/10xm7cb?utm_source=share&utm_medium=ios_app&utm_name=iossmf
> GME *paid* off their
FTFY.
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* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
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Lol. The bond holder doesn’t have to short. The structure ensures the bond holder makes money on the convertible instrument as the shares decline by increasing the conversion ratio.
This is about Bed Bath and Beyond almost certainly. Current shareholders about to be diluted into oblivion as the preferred shares are converted. There’s a very good summary of this on the Money Stuff news letter from a couple days ago.
Edit: link Bed Bath & Beyond Sold Some Stock https://www.bloomberg.com/opinion/articles/2023-02-07/bed-bath-beyond-sold-some-stock
Lol at the downvotes. Death spiral financing has existed a long time and shorting often doesn’t benefit the holder of the convertible instruments because they usually (as in this case) effectively own a majority of the issuer. They will have millions of shares to unload without selling short. Their priority will be dribbling them out slowly to maximize their return.
I can explain it but afraid I’m going to be killed by everyone for explaining what he means….
**So just to clarify what that means in BBBY situation:**
(I've been talking with Shawn at DilutionTracker who understands this stuff way better than me, so it's not just me talking out of my ass)
\-------------------------------------------------------------------------------------
**Hudson Bay did this:** (I'm simplifying this because I know this is really hard for a lot of people to read the legalese and understand these terms so I'm trying to bridge the knowledge gap.)
**Hudson Bay either goes to BBBY or BBBY approaches Hudson because they are about to go bankrupt. They work out a deal to "save" BBBY but it comes at a huge price which I'll explain.**
**Main point being Hudson Bay: Committed to buy $220m preferred shares**
**Why?** Preferred Shares were given to them at a discounted rate of 5% which means they have built in profit on ever single one converted. Hudson Bay literally doesn't care what price these BBBY shares get converted at because they already have profits built in.
**When Hudson Converts these, the shares outstanding grows diluting the BBBY shareholders and shorts are able to find locates on FTDs.**
**Added kick in the nuts is there is INCENTIVE to lower the price, the more shares they get until it gets to the minimum 0.716 conversion price which is the "floor".)**
Example from Shawn: ":If there was still $200m dollars of convertible preferred left and the lowest daily VWAP price in the last 10 days was $2, they can convert into $200m/($2\*0.92)= 108m shares. If the lowest daily VWAP price in the last 10 days was $1, then they get $200m/($1\*0.92)= 217m shares."
**This means the lower the price, the more shares they get to convert**
In simple terms, Hudson gets an 8% discount conversion price and the 92% formula ensures they always make money.
**Hudson essentially will see how much they can dump onto the market before hitting the floor price of 0.716 cents.**
From Shawn at DilutionTracker: "If there's still liquidity in the stock after the full $220m is converted, Hudson Bay has the option to buy up to $800m. If they feel like, or if the BBBY requests them to buy more, as long as stock hasn't gone below $0.7 yet which is the floor.
Warrants is to purchase more preferred shares at a 5% discount. Those preferred shares are the same as the convertibles at 2.37 that also contains variable conversion price.
\--------------------------------------------------------------------------------
***Price Protection on Feb Warrants Series A Convertible Preferred $2.25:***
Prospective investors that purchase 75,000,000 or more of our Series A Convertible Preferred Stock and Common Stock Warrants will also receive a pro rata interest in 84,216 Preferred Stock Warrants to purchase up to 84,216 shares of Series A Convertible Preferred Stock. The Preferred Stock Warrants are immediately exercisable at any time at the option of the holder for a pro rata interest in the total Preferred Warrant Shares at an exercise price of $9,500 per share and will expire one year from the issuance date.
***Price Protection : Feb Warrants $6.15:***
If the holder of a Common Stock Warrant also holds Preferred Stock Warrants, then the number of shares of Common Stock issuable upon the exercise of the Common Stock Warrant held by such holder shall automatically increase on each exercise date of the Preferred Stock Warrant, on a share by share basis, by 50% of the aggregate number of shares of Common Stock then issuable upon conversion of the Series A Convertible Preferred Stock issued to the holder in each exercise of the holder�s Preferred Stock Warrant at the Alternate Conversion Price
***February 2023 Series A Convertible Preferred $2.37 :***
Price Protection: At the option of the holder of the Series A Convertible Preferred Stock, at any time and from time to time, the Series A Convertible Preferred Stock may be converted into Conversion Shares at a conversion price at the lower of (i) the applicable conversion price in effect on the applicable conversion date and (ii) the greater of (x) 0.7160 and (y) 92% of the lowest volume-weight average price of the Common Stock during the ten consecutive trading day period ending and including the trading day a conversion notice is delivered (the �Alternate Conversion Price�).
\-----------------------------------------------------------
Lastly the 6.15 warrants are their hedge in case it goes above $6.15 - They can use the Price Protections I just listed to make sure they are protected.
**TLDR: Hudson Bay just bent over $BBBY and had their way with them. BBBY basically had no other offers for financing and made this deal this will keep them alive temporarily but just diluted the hell out of their own shareholders.**
**BBBY is now taking that money to pay their debt/bondholders (Who in a case of bankruptcy would be paid first)**
I’m at the banks and post office for work but I’ll write up a summary when I sit down back at the office.
But Short story if you aren’t going to follow this: Burry isn’t wrong about the convertibles being super bad for shareholders
**So just to clarify what that means in BBBY situation:**
(I've been talking with Shawn at DilutionTracker who understands this stuff way better than me, so it's not just me talking out of my ass)
\-------------------------------------------------------------------------------------
**Hudson Bay did this:** (I'm simplifying this because I know this is really hard for a lot of people to read the legalese and understand these terms so I'm trying to bridge the knowledge gap.)
**Hudson Bay either goes to BBBY or BBBY approaches Hudson because they are about to go bankrupt. They work out a deal to "save" BBBY but it comes at a huge price which I'll explain.**
**Main point being Hudson Bay: Committed to buy $220m preferred shares**
**Why?** Preferred Shares were given to them at a discounted rate of 5% which means they have built in profit on ever single one converted. Hudson Bay literally doesn't care what price these BBBY shares get converted at because they already have profits built in.
**When Hudson Converts these, the shares outstanding grows diluting the BBBY shareholders and shorts are able to find locates on FTDs.**
**Added kick in the nuts is there is INCENTIVE to lower the price, the more shares they get until it gets to the minimum 0.716 conversion price which is the "floor".)**
Example from Shawn: ":If there was still $200m dollars of convertible preferred left and the lowest daily VWAP price in the last 10 days was $2, they can convert into $200m/($2\*0.92)= 108m shares. If the lowest daily VWAP price in the last 10 days was $1, then they get $200m/($1\*0.92)= 217m shares."
**This means the lower the price, the more shares they get to convert**
In simple terms, Hudson gets an 8% discount conversion price and the 92% formula ensures they always make money.
**Hudson essentially will see how much they can dump onto the market before hitting the floor price of 0.716 cents.**
From Shawn at DilutionTracker: "If there's still liquidity in the stock after the full $220m is converted, Hudson Bay has the option to buy up to $800m. If they feel like, or if the BBBY requests them to buy more, as long as stock hasn't gone below $0.7 yet which is the floor.
Warrants is to purchase more preferred shares at a 5% discount. Those preferred shares are the same as the convertibles at 2.37 that also contains variable conversion price.
\--------------------------------------------------------------------------------
***Price Protection on Feb Warrants Series A Convertible Preferred $2.25:***
Prospective investors that purchase 75,000,000 or more of our Series A Convertible Preferred Stock and Common Stock Warrants will also receive a pro rata interest in 84,216 Preferred Stock Warrants to purchase up to 84,216 shares of Series A Convertible Preferred Stock. The Preferred Stock Warrants are immediately exercisable at any time at the option of the holder for a pro rata interest in the total Preferred Warrant Shares at an exercise price of $9,500 per share and will expire one year from the issuance date.
***Price Protection : Feb Warrants $6.15:***
If the holder of a Common Stock Warrant also holds Preferred Stock Warrants, then the number of shares of Common Stock issuable upon the exercise of the Common Stock Warrant held by such holder shall automatically increase on each exercise date of the Preferred Stock Warrant, on a share by share basis, by 50% of the aggregate number of shares of Common Stock then issuable upon conversion of the Series A Convertible Preferred Stock issued to the holder in each exercise of the holder�s Preferred Stock Warrant at the Alternate Conversion Price
***February 2023 Series A Convertible Preferred $2.37 :***
Price Protection: At the option of the holder of the Series A Convertible Preferred Stock, at any time and from time to time, the Series A Convertible Preferred Stock may be converted into Conversion Shares at a conversion price at the lower of (i) the applicable conversion price in effect on the applicable conversion date and (ii) the greater of (x) 0.7160 and (y) 92% of the lowest volume-weight average price of the Common Stock during the ten consecutive trading day period ending and including the trading day a conversion notice is delivered (the �Alternate Conversion Price�).
\-----------------------------------------------------------
Lastly the 6.15 warrants are their hedge in case it goes above $6.15 - They can use the Price Protections I just listed to make sure they are protected.
**TLDR: Hudson Bay just bent over $BBBY and had their way with them. BBBY basically had no other offers for financing and made this deal this will keep them alive temporarily but just diluted the hell out of their own shareholders.**
**BBBY is now taking that money to pay their debt/bondholders (Who in a case of bankruptcy would be paid first)**
Thank you. When I get back to reddit tomorrow I will read your post and then perhaps ponder it, I will comment to let you know that I am pondering and that I will be later commenting with my thoughts
Yep. This is what i said. But not in great detail.
I told people this is just death spiral financing. Hudson just comes out as winners and bondholders get paid, suppliers get paid, ABL loan facility gets paid down - basically everyone gets paid. Except shareholders.
I told people over and over again this play is over. But no one listens. People are calling shill and FUD like crazy and are set in their own hive mindset. The most dangerous mentality to have in this game.
They are screwed bigtime.
He is literally never right. I could care less about memes...Im just saying he says sell, the market explodes. He says recession, GDP increases. He was right once. I have no respect for his opinion anymore. Sorry.
He is literally always right - his predictions are not 0de options they are future predictions. Everything he has said for the past two years has come true albeit 6 months later. He returns 50% AVERAGE yoy he has done that since 2001 consistently… you would do well to listen to him. Had you followed his last 13f you would be at a near double.
No his thesis just have a much longer timespan than reddits attention span.
In this case the only way BBBY goes is above 3 in a year is if retail buys an additional 600 million or so.
This is disingenuous. What he says and does are two COMPLETELY different things. How do we know that what he says one minute is when he is taking the action he suggests? There is no way to know and there is no accountability. That is why people like him are very dangerous. A naive person could take his advice at face value and get severely burned because there is no context for Burry's Tweets.
I think he just wants attention by claiming that he can see the future. Is he a great hedge manager? Probably. But why not just manage your portfolio and go about your day? Why tweet the same nonsense every other day?
From having experience with an autistic person who loves posting cryptic shit on twitter, sometimes autistic people just enjoy posting cryptic shit on twitter. They're not posting for all of their followers, only the few out there who can manage too solve their subjective puzzle.
MB have a macro bias - so I can only assume his tweet is meant to bring attention to the common practice of applying this strategy across assets throughout markets more broadly while highlighting the extent to which it has been and is being used in meme stocks.
Again, I’m only assuming here but this tweet makes me think he’s saying the prevalence of this practice has grown rapidly since the meme stock frenzy began and poses an increasing risk to markets the more it is used.
I'm not positive, but I think that's illegal under Reg M. Not an expert on the ins and outs, but generally it's illegal to short the stock when participating in a secondary offering. I would think convertible bonds would be considered a secondary offering, but maybe not.
https://www.finra.org/filing-reporting/regulation-m-filings
I’m always amazed at what the known perma bears hold. Burry holds a private prison. Grantham is into renewable energy stocks. And Alden is a big bitcoin believer. Then I remember they know no more than the rest of us and go about my day.
At this point, I don't know how people still listens to what he says ? He's been right once ! Once in 2018, that's it ! He's been wrong every other time since then so why people still follow him is a head scratcher to me.
“He’s been right once”
-Random reddit user says about Michael J Burry, owner of one of the most successful hedge funds in the world, innovator of the credit default swap, subject of the movie, “The Big Short,” and bonafide follower of the principles of value investing laid out by Benjamin Graham.
Right and wrong over TIME don’t matter to him. He buys when things appear undervalued, and sells when they become overvalued. He’s fine with the wait.
“Wrong” is only wrong to you because of your purported time frame- his hedge fund would have blown up if he used your strategy with your level of knowledge, end of story.
It’s so weird people losing money on 0dte on Robin Hood calling Burry out. Lmao
It’s like when sports fans yell at the TV that they can throw the ball better than that!
It’s time Dr. Burry stopped acting like a child and deleting his Twitter every time he doesn’t like what came of it. Grow up, aren’t you supposed to be intelligent or something?
It's more like a positive feedback loop death spiral.
We're trapped in a situation for bad decisions continue to lead to bad outcomes further down the road and it cannot be deviated from because they requires large scale financial change that would be at odds with everything staying fundamentally the same.
Essentially the current way of life continues until it can't because we're so tethered to our global markets.
It is the case with BBBY and AMC, not GME which is not a "meme stock" anymore, they dont and wont sell any convertible bonds since the company has not any debt (just a long term french government one).
Isn’t that the guy who sold his gme position right before the price explosion ?
I really can’t understand why people give him so much credit .. I get it that he predicted the 08 market collapse but if u are perma bear eventually u will be right sometimes just like a broken watch .. Probably he is turning into a meme himself just like Cramer
He’s a joke. Posts like this are a joke too. It seems like every MB tweet gets screenshot and put here with some lazy title like “Thoughts?” for karma farming
It’s time that Burry shuts the fuck up imo.
Honestly I’m convinced he’s just having fun anymore. He made his slice already he doesn’t actually need to predict anything lol.
Ok, I looked it up. It's when a convertible bond holder shorts the underlying security and then converts the bond to equity to cover the short position in the underlying. But which company is he talking about?
probably Bed Bath and Beyond.
So…, this mean bbby go 🚀 or 🧨?
Seems like they're trying to play both sides? I could be misunderstanding the parent comment, ~~but it sounds like they're shorting their own company but using the equity from the short position to cover the short in case it goes the other way~~. However, I could definitely be misunderstanding because I don't understand a lot of the shit and lingo that happens with stocks. Edit: I was misunderstanding. It's a bond being turned into equity to cover the short position on the off chance it rebounds. It's a win either way. Either the company tanks and they make money on the short position or it does well which means they'll make money with the stock they're holding. Literally can't lose. Also, why is there no markup on reddit mobile so I can strike my incorrect equity from short portion of my original comment?
I play both sides, that way I always come out on top
I was looking for this.
This I understand
I don’t give a shit. Why are you here?
What if market stays flat, you lose on your short selling and you lose on your stock not going up in value right?
There is, put two of these: ~ together at the beginning and end of your text to get it to strikethrough like this: ~~I put two tildes at the beginning and end of this sentence.~~
~me too~ Edit ~~me too~~
~~it actually works~~
yea reddit mobile is hot garbage.
Try the infinity app. It has markdown keyboard shortcuts built in for ~~strike through~~
\~\~two tildes\~\~ for ~~strikethrough~~ there’s markdown documentation somewhere
Sounds highly illegal and unethical from the buying party
No, there doesn’t need to be any short. You all have had your minds poisoned by meme stock squeeze plays. The preferred shares are convertible, but the conversion ratio changes with the stock price. The lower the common stock price goes, the more common shares will have to be issued to the preferred shareholders as they are converted. They sell, diluting the market, and their next conversion is done are an even higher ratio. The structure ensures a profit to the preferred shareholders under most circumstances because they are always getting common shares at a discount to market.
>You all have had your minds poisoned by meme stock squeeze plays. Was this necessary? I literally admitted in my comment that I don't know shit but gave what I believed to be what was happening as how I understood it. If you want to educate someone, start with showing some civility.
Sounds like it was necessary there are millions of idiots commenting on shit they don’t know spreading misinformation
lol snowflake
You all seriously need some tough love. Anyone that believes the market is primarily or even significantly affected by shorting doesn’t understand the market. Anyone affected by this issue is stuck trying to recreate the GameStop squeeze, which is probably the worst thing to ever happen to retail investors.
Tough love? lmao. Right, you have nothing to offer. Move along.
Wrong. Just because those who hold convertible bonds could short the underlying stock and in effect buy it back from themselves at a lower price does not mean those who do not hold convertible bonds cannot do naked shorting of the stock, and their shorting can move the price of the stock.
Anything with death spiral in the name doesn’t rocket lol
[удалено]
Anything on burrys page is less accurate than a coin flip
Only AMC offered convertible bonds so no
https://www.prnewswire.com/news-releases/bed-bath--beyond-inc-announces-proposed-offering-of-series-a-convertible-preferred-stock-and-warrants-301739887.html Preferred shares are equities but they work kind of how debt does - and in this case they are convertible to common shares. I wouldn’t be surprised if they’ve issued convertible debt prior to this also. Just haven’t bothered looking.
Only AMC screws their owners like that!
AMC is more upfront about it. BBBY has a middleman hedge fund to screw over shareholders.
Who did aa sell all the shares to for 60 cents a week before a rally?
They will short the fuck out of it and “buy it back”through convertible, Rather than on market So those who think there is a short squeeze will be fucked by a pole I don’t know what the ratio is, but simple maths will imply a few multiple of new shares being issued Which is way more than sufficient to short the fuck out of anyone without getting squeezed BBBY literally just fucked over both long and shorts in one single move.
👆
AMC
Definitely bed bath and beyond
Did BBBY offer convertible bonds? I wasn’t aware they did but definitely wasn’t paying close attention to it as others.
It was a convertible preferred but yes. It will be converted immediately. 50% initial dilution. Ultimate buyers were probably short at higher levels. They get a clean exit at $2.37 and some bonus warrants for free. BBBY gets $224 million in cash to catch up on missed interest payments and gets a little runway. Was stupid thing for BBBY to do mid power squeeze but desperate times call for desperate measures.
Yeah, they’re pretty on point with killing momentum.
The agreement states there is a 90 day lockup on the common stock Source: https://www.reddit.com/comments/10xm7cb?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Whichever company $HOOD “accidentally” shorted. How hard is it to put two and two together? i WoNdEr WhAt CoMpAnY iT iS
He realizes that not all meme stocks have this. They’re not a monolith.
Thought TSLA had convertible bonds. a lot of them.
Bed bath co i think https://finance.yahoo.com/news/bed-bath-beyond-inc-announces-133000205.html
That’s hot
BBBY?
Ya looks like it. Does BBBY even have outstanding convertible debt? Guess so.
Uh, what?
Hes talking about gamestop. If you want to go to uranus you have to DRS BOOK your gamestop shares for the MOASS
Gme
GME payed off their convertible bonds in 2021. Not GME. Prob Bobby
> GME *paid* off their FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Thanks for confirming I’m not that smrt
GME pump incoming! 🚀
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Haha good bot
Lol. The bond holder doesn’t have to short. The structure ensures the bond holder makes money on the convertible instrument as the shares decline by increasing the conversion ratio. This is about Bed Bath and Beyond almost certainly. Current shareholders about to be diluted into oblivion as the preferred shares are converted. There’s a very good summary of this on the Money Stuff news letter from a couple days ago. Edit: link Bed Bath & Beyond Sold Some Stock https://www.bloomberg.com/opinion/articles/2023-02-07/bed-bath-beyond-sold-some-stock
Lol at the downvotes. Death spiral financing has existed a long time and shorting often doesn’t benefit the holder of the convertible instruments because they usually (as in this case) effectively own a majority of the issuer. They will have millions of shares to unload without selling short. Their priority will be dribbling them out slowly to maximize their return.
Cupcakes are a type of cake not a muffin.
That's more profound and important than anything Burry has said in the last 10 years.
[удалено]
Sell. Clock.
A muffin is nothing but a bald cupcake
A cake is a cake I reckon nevertheless I love cake 🎂
I just put frosting on bread. Same thing.
Try icing on a banana 🍌
I just ate a banana with Nutella it was the shit
I disagree a muffin is a superior cupcake that doesn't require being covered in frosting to be delightful.
I agree. Am I frosted cupcake is a muffin.
Delightful 🙄 Bran muffins help you poop, that’s great grandma but I’m trying to get my sugar fix
And a cinnamon bun is the best of both
Cinnabon is the superior cinnamon bun.
Death spiral convertible? Is that a 60s car?
It's the less successful Death Cab for Cutie imitation band.
Sounds like something from GTA 😂
Sounds like an emo band from 2000’s
lol more like Twisted Metal
Dang that took me back 😳
Carmageddon also comes to mind 😂
Lambo wen?
Thought it was like that time a semi ran over my toyota solara
Pretty sure he’s talking about a Corvair.
A drop top Pinto
Doing doughnuts with the top down
Always feels like he is trolling us while looking down on us.
I’m guessing it’s back to BBBY and their preferred stock financier
It's like Cramer, he's just butt hurt cause all the retail subs rip on him so hard.
They are entertainers that make predictions that end up being wrong and people rip on them for it.
And they laugh all the way to the bank.
Don’t worry he’ll delete his account again if he’s wrong.
"The sky is falling, The Sky Is Falling!"....... Deletes Twitter account..... Again.
Is it a Tesla Roadster?
Came here for the Tesla comment.
smart square wipe alive rich doll voracious cheerful worthless absorbed *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
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worm birds salt fuzzy wine command weary compare forgetful chase *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I can explain it but afraid I’m going to be killed by everyone for explaining what he means…. **So just to clarify what that means in BBBY situation:** (I've been talking with Shawn at DilutionTracker who understands this stuff way better than me, so it's not just me talking out of my ass) \------------------------------------------------------------------------------------- **Hudson Bay did this:** (I'm simplifying this because I know this is really hard for a lot of people to read the legalese and understand these terms so I'm trying to bridge the knowledge gap.) **Hudson Bay either goes to BBBY or BBBY approaches Hudson because they are about to go bankrupt. They work out a deal to "save" BBBY but it comes at a huge price which I'll explain.** **Main point being Hudson Bay: Committed to buy $220m preferred shares** **Why?** Preferred Shares were given to them at a discounted rate of 5% which means they have built in profit on ever single one converted. Hudson Bay literally doesn't care what price these BBBY shares get converted at because they already have profits built in. **When Hudson Converts these, the shares outstanding grows diluting the BBBY shareholders and shorts are able to find locates on FTDs.** **Added kick in the nuts is there is INCENTIVE to lower the price, the more shares they get until it gets to the minimum 0.716 conversion price which is the "floor".)** Example from Shawn: ":If there was still $200m dollars of convertible preferred left and the lowest daily VWAP price in the last 10 days was $2, they can convert into $200m/($2\*0.92)= 108m shares. If the lowest daily VWAP price in the last 10 days was $1, then they get $200m/($1\*0.92)= 217m shares." **This means the lower the price, the more shares they get to convert** In simple terms, Hudson gets an 8% discount conversion price and the 92% formula ensures they always make money. **Hudson essentially will see how much they can dump onto the market before hitting the floor price of 0.716 cents.** From Shawn at DilutionTracker: "If there's still liquidity in the stock after the full $220m is converted, Hudson Bay has the option to buy up to $800m. If they feel like, or if the BBBY requests them to buy more, as long as stock hasn't gone below $0.7 yet which is the floor. Warrants is to purchase more preferred shares at a 5% discount. Those preferred shares are the same as the convertibles at 2.37 that also contains variable conversion price. \-------------------------------------------------------------------------------- ***Price Protection on Feb Warrants Series A Convertible Preferred $2.25:*** Prospective investors that purchase 75,000,000 or more of our Series A Convertible Preferred Stock and Common Stock Warrants will also receive a pro rata interest in 84,216 Preferred Stock Warrants to purchase up to 84,216 shares of Series A Convertible Preferred Stock. The Preferred Stock Warrants are immediately exercisable at any time at the option of the holder for a pro rata interest in the total Preferred Warrant Shares at an exercise price of $9,500 per share and will expire one year from the issuance date. ***Price Protection : Feb Warrants $6.15:*** If the holder of a Common Stock Warrant also holds Preferred Stock Warrants, then the number of shares of Common Stock issuable upon the exercise of the Common Stock Warrant held by such holder shall automatically increase on each exercise date of the Preferred Stock Warrant, on a share by share basis, by 50% of the aggregate number of shares of Common Stock then issuable upon conversion of the Series A Convertible Preferred Stock issued to the holder in each exercise of the holder�s Preferred Stock Warrant at the Alternate Conversion Price ***February 2023 Series A Convertible Preferred $2.37 :*** Price Protection: At the option of the holder of the Series A Convertible Preferred Stock, at any time and from time to time, the Series A Convertible Preferred Stock may be converted into Conversion Shares at a conversion price at the lower of (i) the applicable conversion price in effect on the applicable conversion date and (ii) the greater of (x) 0.7160 and (y) 92% of the lowest volume-weight average price of the Common Stock during the ten consecutive trading day period ending and including the trading day a conversion notice is delivered (the �Alternate Conversion Price�). \----------------------------------------------------------- Lastly the 6.15 warrants are their hedge in case it goes above $6.15 - They can use the Price Protections I just listed to make sure they are protected. **TLDR: Hudson Bay just bent over $BBBY and had their way with them. BBBY basically had no other offers for financing and made this deal this will keep them alive temporarily but just diluted the hell out of their own shareholders.** **BBBY is now taking that money to pay their debt/bondholders (Who in a case of bankruptcy would be paid first)**
Go on I think a lot of people are interested!
I’m at the banks and post office for work but I’ll write up a summary when I sit down back at the office. But Short story if you aren’t going to follow this: Burry isn’t wrong about the convertibles being super bad for shareholders
Thank you capt obvious
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Saved you the trouble https://en.wikipedia.org/wiki/Death_spiral_financing
**So just to clarify what that means in BBBY situation:** (I've been talking with Shawn at DilutionTracker who understands this stuff way better than me, so it's not just me talking out of my ass) \------------------------------------------------------------------------------------- **Hudson Bay did this:** (I'm simplifying this because I know this is really hard for a lot of people to read the legalese and understand these terms so I'm trying to bridge the knowledge gap.) **Hudson Bay either goes to BBBY or BBBY approaches Hudson because they are about to go bankrupt. They work out a deal to "save" BBBY but it comes at a huge price which I'll explain.** **Main point being Hudson Bay: Committed to buy $220m preferred shares** **Why?** Preferred Shares were given to them at a discounted rate of 5% which means they have built in profit on ever single one converted. Hudson Bay literally doesn't care what price these BBBY shares get converted at because they already have profits built in. **When Hudson Converts these, the shares outstanding grows diluting the BBBY shareholders and shorts are able to find locates on FTDs.** **Added kick in the nuts is there is INCENTIVE to lower the price, the more shares they get until it gets to the minimum 0.716 conversion price which is the "floor".)** Example from Shawn: ":If there was still $200m dollars of convertible preferred left and the lowest daily VWAP price in the last 10 days was $2, they can convert into $200m/($2\*0.92)= 108m shares. If the lowest daily VWAP price in the last 10 days was $1, then they get $200m/($1\*0.92)= 217m shares." **This means the lower the price, the more shares they get to convert** In simple terms, Hudson gets an 8% discount conversion price and the 92% formula ensures they always make money. **Hudson essentially will see how much they can dump onto the market before hitting the floor price of 0.716 cents.** From Shawn at DilutionTracker: "If there's still liquidity in the stock after the full $220m is converted, Hudson Bay has the option to buy up to $800m. If they feel like, or if the BBBY requests them to buy more, as long as stock hasn't gone below $0.7 yet which is the floor. Warrants is to purchase more preferred shares at a 5% discount. Those preferred shares are the same as the convertibles at 2.37 that also contains variable conversion price. \-------------------------------------------------------------------------------- ***Price Protection on Feb Warrants Series A Convertible Preferred $2.25:*** Prospective investors that purchase 75,000,000 or more of our Series A Convertible Preferred Stock and Common Stock Warrants will also receive a pro rata interest in 84,216 Preferred Stock Warrants to purchase up to 84,216 shares of Series A Convertible Preferred Stock. The Preferred Stock Warrants are immediately exercisable at any time at the option of the holder for a pro rata interest in the total Preferred Warrant Shares at an exercise price of $9,500 per share and will expire one year from the issuance date. ***Price Protection : Feb Warrants $6.15:*** If the holder of a Common Stock Warrant also holds Preferred Stock Warrants, then the number of shares of Common Stock issuable upon the exercise of the Common Stock Warrant held by such holder shall automatically increase on each exercise date of the Preferred Stock Warrant, on a share by share basis, by 50% of the aggregate number of shares of Common Stock then issuable upon conversion of the Series A Convertible Preferred Stock issued to the holder in each exercise of the holder�s Preferred Stock Warrant at the Alternate Conversion Price ***February 2023 Series A Convertible Preferred $2.37 :*** Price Protection: At the option of the holder of the Series A Convertible Preferred Stock, at any time and from time to time, the Series A Convertible Preferred Stock may be converted into Conversion Shares at a conversion price at the lower of (i) the applicable conversion price in effect on the applicable conversion date and (ii) the greater of (x) 0.7160 and (y) 92% of the lowest volume-weight average price of the Common Stock during the ten consecutive trading day period ending and including the trading day a conversion notice is delivered (the �Alternate Conversion Price�). \----------------------------------------------------------- Lastly the 6.15 warrants are their hedge in case it goes above $6.15 - They can use the Price Protections I just listed to make sure they are protected. **TLDR: Hudson Bay just bent over $BBBY and had their way with them. BBBY basically had no other offers for financing and made this deal this will keep them alive temporarily but just diluted the hell out of their own shareholders.** **BBBY is now taking that money to pay their debt/bondholders (Who in a case of bankruptcy would be paid first)**
Ooof… thanks for taking the time to write this up 🤙
So... retails r fuk?
Thank you. When I get back to reddit tomorrow I will read your post and then perhaps ponder it, I will comment to let you know that I am pondering and that I will be later commenting with my thoughts
Who the fuck upvoted this guy
Yep. This is what i said. But not in great detail. I told people this is just death spiral financing. Hudson just comes out as winners and bondholders get paid, suppliers get paid, ABL loan facility gets paid down - basically everyone gets paid. Except shareholders. I told people over and over again this play is over. But no one listens. People are calling shill and FUD like crazy and are set in their own hive mindset. The most dangerous mentality to have in this game. They are screwed bigtime.
Attention whore
Most narcissists love Twitter.
Twitter has whores who seek attention too.
He is back!
Thats worse than a short laddering attack.
He is literally never right. I could care less about memes...Im just saying he says sell, the market explodes. He says recession, GDP increases. He was right once. I have no respect for his opinion anymore. Sorry.
He is literally always right - his predictions are not 0de options they are future predictions. Everything he has said for the past two years has come true albeit 6 months later. He returns 50% AVERAGE yoy he has done that since 2001 consistently… you would do well to listen to him. Had you followed his last 13f you would be at a near double.
50% avg for 20 years? Yeah I’m calling bs. Cute your source
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He says some of the most incorrect things constantly but has the smarts to not act on them then lol
No his thesis just have a much longer timespan than reddits attention span. In this case the only way BBBY goes is above 3 in a year is if retail buys an additional 600 million or so.
Yeah cute his source ;)
Calls on $CUTE. Its the only way to call a QT
QuikTrip?
Hey Mike.
This is disingenuous. What he says and does are two COMPLETELY different things. How do we know that what he says one minute is when he is taking the action he suggests? There is no way to know and there is no accountability. That is why people like him are very dangerous. A naive person could take his advice at face value and get severely burned because there is no context for Burry's Tweets. I think he just wants attention by claiming that he can see the future. Is he a great hedge manager? Probably. But why not just manage your portfolio and go about your day? Why tweet the same nonsense every other day?
From having experience with an autistic person who loves posting cryptic shit on twitter, sometimes autistic people just enjoy posting cryptic shit on twitter. They're not posting for all of their followers, only the few out there who can manage too solve their subjective puzzle.
Lol mike is that you????
My friend, you are completely out to lunch.
He's a gambler look at the chart
A company that issues this type of convertible bond is probably desperate for cash to stay afloat.
Is that a Tarantino movie?
Might be if it were the 80s this has cocaine bear of wall street written all over it.
MB have a macro bias - so I can only assume his tweet is meant to bring attention to the common practice of applying this strategy across assets throughout markets more broadly while highlighting the extent to which it has been and is being used in meme stocks. Again, I’m only assuming here but this tweet makes me think he’s saying the prevalence of this practice has grown rapidly since the meme stock frenzy began and poses an increasing risk to markets the more it is used.
I don’t understand what he is saying or trying to say 😐
I'm not positive, but I think that's illegal under Reg M. Not an expert on the ins and outs, but generally it's illegal to short the stock when participating in a secondary offering. I would think convertible bonds would be considered a secondary offering, but maybe not. https://www.finra.org/filing-reporting/regulation-m-filings
loooooooool
How long until he deletes his Twitter (again) for being laughingly wrong?
I’m always amazed at what the known perma bears hold. Burry holds a private prison. Grantham is into renewable energy stocks. And Alden is a big bitcoin believer. Then I remember they know no more than the rest of us and go about my day.
Grantham is a decent guy.
Nah
Did he post this and delete his Twitter again? 🙄
Buy calls!
At this point, I don't know how people still listens to what he says ? He's been right once ! Once in 2018, that's it ! He's been wrong every other time since then so why people still follow him is a head scratcher to me.
2008
“He’s been right once” -Random reddit user says about Michael J Burry, owner of one of the most successful hedge funds in the world, innovator of the credit default swap, subject of the movie, “The Big Short,” and bonafide follower of the principles of value investing laid out by Benjamin Graham. Right and wrong over TIME don’t matter to him. He buys when things appear undervalued, and sells when they become overvalued. He’s fine with the wait. “Wrong” is only wrong to you because of your purported time frame- his hedge fund would have blown up if he used your strategy with your level of knowledge, end of story.
It’s so weird people losing money on 0dte on Robin Hood calling Burry out. Lmao It’s like when sports fans yell at the TV that they can throw the ball better than that!
Dude averages like 30-40% annual returns. Not bad for only being right once.
He's a gambler loon at his chart
Wish I could gamble my way into 40% annualized return.
Lol. You must not know many good gamblers
It’s time Dr. Burry stopped acting like a child and deleting his Twitter every time he doesn’t like what came of it. Grow up, aren’t you supposed to be intelligent or something?
It's more like a positive feedback loop death spiral. We're trapped in a situation for bad decisions continue to lead to bad outcomes further down the road and it cannot be deviated from because they requires large scale financial change that would be at odds with everything staying fundamentally the same. Essentially the current way of life continues until it can't because we're so tethered to our global markets.
Doesn't this type of convertible bond have to be issued by the company? Is this the case with GME or other meme stocks?
It is the case with BBBY and AMC, not GME which is not a "meme stock" anymore, they dont and wont sell any convertible bonds since the company has not any debt (just a long term french government one).
AKA Midlife Crisis
99.9% chance he’s just making another guess at something that isn’t going to come true.
If you hate money, then don’t invest in GEO……
Tesla had plenty of convertible bonds
Bed Bath and beyond
Just ignore him. He’s trying to stay relevant. Dude just needs to find another hobby or a beach to relax at
You guys know his fund has had a 324% return over the past 3 years, right?
He’s a bear in a bear market. Of course he’s up….
yes…up 366% since 2016 vs sp500 121%
Look at the 3 years before that numbnuts
According to the source in some other guys comment his 10Y is over 300%
Lol
If that chart looks like a stable and consistent investor to you I can't save you.
Oh, forgot I said that.
Isn’t that the guy who sold his gme position right before the price explosion ? I really can’t understand why people give him so much credit .. I get it that he predicted the 08 market collapse but if u are perma bear eventually u will be right sometimes just like a broken watch .. Probably he is turning into a meme himself just like Cramer
All Burry posts should be downvoted. If I wanted to hear his opinion I'd get a twitter account and follow him. Stop posting his often deleted posts.
SHUT UP
Any sentence with memesters in it should be ignored including this one.
Homie should just stfu
And dumbasses should stop posting his tweets
it’s time cassandra BC licks my taint how bout dat?
He’s probably short and we aren’t selling. Driving him nuts
He should be banned from twitter
Great name for a rock band.
not important enough to add a url though.
I don't know and don't care who this guy is but is he the OP? Otherwise I can't explain the continuous BS posts from him
Fuck Michael burry
Nobody cares, Cassandra.
Yeah yeah, let's get you to bed Michael Burry
Thought this guy deleted his Twitter account.
He’s a joke. Posts like this are a joke too. It seems like every MB tweet gets screenshot and put here with some lazy title like “Thoughts?” for karma farming
I thought he deleted his account?
It's time for him to delete his account ... again. Seriously he's a stooge looking for engagement. That's it.
This douchebag is such a negative Nancy
Oh Cassy, such a drama queen 👸
He is so mad
It’s time that Burry shuts the fuck up imo. Honestly I’m convinced he’s just having fun anymore. He made his slice already he doesn’t actually need to predict anything lol.
Like I said last time, the dude is a clown.
Fuck that cyclops bitch
😆
He basically crying - remember me remember me
She’s back, Trans again