Plus another thing:
The subscribed money ($25,000,000) goes into Orbite coffer at closing date (or close to it) of the debentures (Closing date = Dec. 13, 2012).
When the debentures are converted into shares, Orbite doesn't have to pay anything at Maturity Date for those converted debentures.
You still don't make sense in your scenario.
You better make sure your shorting makes more than your 8 % and at what level you begin your shorting.you may end up pixxing in the wind more than you expect.
The smarter move wouild be to let the stock rise as much as posible above 3.50 while you get your assured 8% and guaranteed capital. Sell to get back your capital./;
At this stage you have
1- 8% accumulated
2- retrieved your initial capiital [in the form of shares]
3- share in the growth going forward at 0.00 cost [the difference between the share price and conversion price is your direct profit]
Whre you see an advantage in shorting as being a convertible hollder at this stage is starnge to me to say the least.
But hey if you don't belive and are quite sure of it, short it now, why wait till 3.50 ??
As before as I mentioned, you remain clueless.
If i am holder of the Convertible and it goes above 3.50 and i want to sell, i will go short the stock (as i am fully hedged) get my proceeds and still collect my 8% on my origional purchase. Unless there is a call feature ORT may not get its funds for a while. Plus even as it trades below 3.50 and i am a note holder i may consider shorting ."