1. What is the Convertible Bond Conversion?
MGEN Solution announced the conversion of convertible bonds (conversion price of 1,103 KRW) totaling 906,618 shares. This represents approximately 1.98% of the current market capitalization. New shares are scheduled to be listed on October 2nd.
2. Why the Conversion?
MGEN Solution is pursuing various businesses such as ICT, Bio, and fire protection electrics, and issued convertible bonds to secure investment funds. The exercise of conversion rights converts debt into equity, improving the financial structure.
3. Impact on Stock Price?
- Short-term Impact: Potential stock price decline due to stock dilution from new share issuance. The current stock price is lower than the conversion price, raising the possibility of profit-taking sales.
- Long-term Impact: If the secured funds contribute to business expansion and fundamental improvement, it can act as a long-term stock price driver.
4. What Should Investors Do?
MGEN Solution currently faces both growth potential and financial instability. Therefore, rather than reacting emotionally to short-term stock price fluctuations, it is crucial to carefully monitor the company’s fundamental improvements, remaining convertible bonds, and new business performance, and make investment decisions from a mid- to long-term perspective.
What are convertible bonds?
Convertible bonds are a type of bond that gives the holder the right to convert them into shares of common stock at a predetermined price.
Why can the conversion of convertible bonds negatively impact the stock price?
When new shares are issued due to the conversion of convertible bonds, the number of outstanding shares increases, potentially diluting the value of existing shares.
What are the key investment points for MGEN Solution?
MGEN Solution holds a portfolio of businesses with high future growth potential, such as ICT, Bio, and fire protection electrics. However, it is necessary to continuously monitor financial soundness and profitability improvements.
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