Oil price of 100 dollars × exchange rate of 1,500 won — Which company’s CB is breaking out now?

When an announcement was made that a convertible bond (CB) would be issued,

Most individual investors pass it over, thinking, “Aren’t they just corporate bonds?”

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That is the most expensive mistake.

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What is CB

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It is a bond, but can be converted to stocks under certain conditions.

Investor's perspective: Earn profits by earning interest and converting to stocks when the stock price rises.

From the issuer’s perspective: Financing possible at low interest rates

The problem lies in the way the structure is designed.

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5 things individual investors must know

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① CB is the beginning of shareholder dilution

When CBs are converted to stocks, the number of issued shares increases → existing shareholders' equity ratio decreases

10 billion CB → Millions of new shares can be issued upon conversion

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② Refixing provisions are more dangerous

A clause that allows the conversion price to continue to be lowered in line with stock price declines.

As the stock price falls, convert to more shares → accelerate dilution

Especially in KOSDAQ small-cap stocks.

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③ The key is who bought the CB

Private equity fund linked to major shareholders and executives acquires CB → Conflict of interest structure

Relational risk perspective: warning sign when CB acquirer network overlaps with executive network

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④ Repeated CB issuance is an alarm sound

One-time CB issuance: means of financing

2-3 repeated issuances: structural design possibilities

Related research (Heo Seo-young, 2025): Minority shareholder losses occur structurally in companies that repeatedly issue CB

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⑤ Financial statements are records after the game is over.

Financial indicators were fine at the time of CB issuance.

Dilution of stock price → liquidation of majority shareholders' shares → liquidation process takes place over several years

Leading signals come first from the network.

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Quick check of my holdings

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If you are worried about your current holdings:

DART disclosure → Check convertible bond issuance history

Confirm whether the CB acquirer is a corporation related to the majority shareholder

View relational risk index at RaymondsRisk

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key message

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Read the relationships behind the numbers.

The signal has already started when the financial statements are in order.

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RaymondsRisk White Paper: https://www.konnect-ai.net/whitepaper

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