Quote:
Originally Posted by BigCrippyZ
The day after WWE's announcement of the notes, WWE's stock, which reached a near annual record high close the day prior, fell and remained below $19 for over a month. Sure, it was temporary, but WWE investors were at least initially concerned about the possibility of dilution of their stock.
What you're also failing to address is that WWE, not the note purchaser, has the option to convert these notes to common stock. While that's good for WWE in regards to the debt, in the event they can't repay the notes by 2023, it's actually bad for their existing investors and potentially for WWE's future stock value. If WWE elects or simply has no better alternative but to convert the notes to common stock, this will dilute the stock for existing shareholders and decrease the stock value.
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So did it occur to you that investors dug into the deal and the numbers and came to the conclusion that it was a good business move? Considering the stock is now near their 52 week high, your fear about the deal is unfounded. Or are you smarter than the market?