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?”
That is the most expensive mistake.
What is CB
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.
5 things individual investors must know
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
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.
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
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
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.
Quick check of my holdings
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
key message
Read the relationships behind the numbers.
The signal has already started when the financial statements are in order.
RaymondsRisk White Paper: https://www.konnect-ai.net/whitepaper
#relationalrisk #raymondsrisk #raymondsindex #konnectai
Comments
Post a Comment