1. The basic principle of convertible bonds conversion is to convert convertible bonds into corresponding stocks according to the agreed conversion price. The conversion price refers to the number or amount of shares to be paid when each convertible bond is converted into shares. When the conversion price of convertible bonds is lower than the current market price, the conversion right is attractive to investors. Investors can choose to convert convertible bonds into stocks, thus enjoying the rising space of the company's stocks.
2. Operation method of convertible bonds into shares The operation method of convertible bonds into shares is usually explained in detail by the issuing company. Investors need to complete the conversion procedures within the prescribed conversion period before they can convert convertible bonds into stocks. Generally speaking, investors can convert convertible bonds into stocks through the following steps:
(1) Understand the conversion conditions: Investors need to read the issuance documents of convertible bonds carefully and understand the conversion conditions, including the conversion price and conversion period.
(2) Timing of stock conversion: Investors need to choose the appropriate timing of stock conversion according to market conditions and personal investment strategies. Usually, when the conversion price is lower than the current market price, investors will choose to convert shares.
(3) Fulfill the procedures for share conversion: investors need to fill in the application form for share conversion and submit relevant materials according to the requirements provided by the issuing company. The issuing company will confirm the validity of the application for share conversion according to the application of investors.
(4) Confirmation of the results of share conversion: Generally speaking, after the application for share conversion is submitted, the issuing company will review it within a certain period of time and notify the investors of the results of the share conversion. Investors can check the stock conversion results through the securities account.
3. Risks and Precautions of Convertible Bonds Although the convertible bond conversion operation is attractive, it is also accompanied by certain risks and precautions. The following are the factors that investors need to consider when converting convertible bonds into shares:
(1) conversion price: investors need to pay attention to the gap between the conversion price and the current market price. If the conversion price is higher than the current market price, the conversion operation may bring losses.
(2) Market quotation: The stock conversion operation needs to consider the current market quotation. If the market is not good and the stock price falls, the stock conversion operation may bring losses.
(3) company fundamentals: investors need to analyze the company's fundamentals and evaluate the company's development prospects and performance. The conversion operation needs to consider the long-term value of the company.
4. Advantages and disadvantages of convertible bonds Convertible bonds have certain advantages and disadvantages. Investors need to comprehensively consider the following factors:
Advantages:
(1) Flexibility: Convertible bonds have the characteristics of both bonds and stocks, and investors can choose to convert them into stocks or hold them until maturity according to market conditions and personal needs.
(2) Income potential: If the conversion price is lower than the current market price, the conversion operation may bring the income brought by the stock price increase.
(3) Risk control: Convertible bonds have the characteristics of bonds, and the risk of convertible bonds is lower than that of ordinary stocks.
Disadvantages:
(1) restrictions: Convertible bonds may be converted into shares under the conditions and restrictions set by the issuing company.
(2) Conversion price: If the conversion price is higher than the current market price, the conversion operation may bring losses.
(3) Market risk: the stock conversion operation needs to consider the changes of market conditions, and market risk may have an impact on the stock conversion operation.
5. Reference indicators of convertible bonds Investors can refer to the following indicators when converting convertible bonds into shares:
(1) conversion premium rate: the conversion premium rate refers to the ratio of the difference between the conversion price and conversion value of convertible bonds to the conversion value. The lower premium rate of share conversion may mean that the operation of share conversion is more attractive.
(2) Conversion value: Conversion value refers to the value of convertible bonds converted into stocks. Investors can evaluate the profit potential of the conversion operation according to the gap between the conversion value and the current market price.
(3) Market conditions: Investors need to pay attention to changes in market conditions, including the ups and downs of the stock market and changes in market risks.
Convertible bonds into shares is an operation to convert bonds into stocks. Investors need to carefully understand the conditions and operation methods of stock conversion, and comprehensively consider risks and benefits in order to make reasonable investment decisions. Investors can also refer to the premium rate of share conversion, share conversion value and market conditions for risk control and investment decision.