death spiral convertible


A convertible bond issued by a distressed company with a conversion ratio that moves in the opposite direction of the share price. A death spiral convertible offers more shares to the security-holder as the price of shares decreases (an increasing conversion ratio), which decreases the control that common shareholders can exert by dilution. This type of convertible is used by companies who would not be able to find financing through other means because of poor financial health. also called toxic convertible, floorless convertible.
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death put Death Star IPO