omagod500

GM/Chrysler Merger Could Be Very Interesting for Sirius

I am trying to understand the concept of convertible bonds as they relate to stock price.... I invite criticism and correction please...

Is the following situation an rough conceptual reflection (I fudged the numbers so they are not exact) of what is going on with SIRI and convertible bonds?

SIRI, trading at $2.25/share, needs cash to pay of some XM debt, which they needed to do to merge. They say "Hey we need some cash! Who wants some bonds??" At some points it becomes clear that they will not be able to obtain the necessary cash through standard bonds... their choices are to negotiate a ridiculous interest rate of offer a different type of bond with some other incentive for the bondholder... convertible bonds... Here is where I am cloudy...

A convertible bond is convertible into shares at some point? When? how does the $1.50 figure play into this? What happens if SIRI is trading at $0.50/share when they mature? What has all the mention of the $3.80 or some figure in that area that would be required to be met for something to happen?? Any help or explanations would be greatly appreciated!

RJO

GM/Chrysler Merger Could Be Very Interesting for Sirius

How long before we see $1.00 again? Is a stock automatically de-listed from the NASDAQ or is there any discretion?