Specific interesting thing from about the first minute: I asked Matt what a convertible bond was for the audience and he gave the true technical answer (a bond which can be surrendered for stock at some agreed upon terms) and why it was interesting to companies.
-
-
Show this thread
-
That reason: you should only convert the bond above some share price, which effectively means you have a call option on buying the stock. Call options are more valuable if volatility is high. This is well understood.
Show this thread -
Therefore, a borrower running a business with high variance (like a tech company with unproven model or a biotech firm) can get a loan which they’d probably not qualify for under traditional underwriting standards (“Where’s your cash flow?!”) by bundling implicit option premium.
Show this thread -
That’s kind of beautiful: the very fact that your business is risky de-risks the offering enough such that you can access the money necessary to take your risky shot.
Show this thread
End of conversation
New conversation -
-
-
I tried to tune in on periscope but could only see the first 2:41 & that's still all I can access there. Is there a link to access full interview somewhere or am I just a pericope dummy?
-
Technical issues. We're going to have it up on the Internet in the not too distant future.
- 1 more reply
New conversation -
-
-
My two favs! Will you post a recording or will this be a written post? Look forward to it!
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.