death spiral

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Death Spiral

A loan that investors give to a publicly-traded company in exchange for convertible bonds. The convertible bonds give the investor a right to buy shares in the company at a low, agreed-upon price. However, issuing these bonds creates more shares outstanding when they are converted, which results in a drop in the share price. The low share price encourages more bondholders to convert their bonds to equity, which causes a further drop in price and the process continues. Because of this disadvantage, companies only engage in death spirals if they badly need cash.

death spiral

The deteriorating financial condition and associated stock price of a cash-starved company that can raise capital only under the most onerous of terms. Restrictions and high interest charges on new capital cause the company to end up in an even worse financial position.
References in periodicals archive ?
This lawsuit comes on the heels Bloomberg's March 12, 2015 report about Magna and its founder Josh Sason entitled, "This 27-Year-Old Made Millions Riding the Death Spirals of Penny Stocks.
Predictions of debt disaster, a debased dollar, and Obama death spirals reflect the same ideology, and the utter failure of these predictions should inspire major doubts about that ideology.
On this level, it doesn't disappoint, with death spirals, flying spins and aerial dancing embroidering the story - a fall by one of the company reminding the audience that this game is not as easy as the professionals make it seem.
Gone are the days of hair-raising cork-screw landings -- dubbed death spirals -- as the bloodshed has ebbed from a peak of sectarian warfare in 2006 and 2007, though bombings and suicide attacks still occur regularly across Iraq
But although the stage may be smaller than an arena, the ice skaters will still be working their magic and entertaining the audiences with triple flips, triple toe loops, double axels, death spirals, camel spins, triple throw axels and lifts galore as part of their unique style of theatre on ice.
For this reason, the securities are known as toxic or death spirals, and are used only by companies in dire need of cash.
According to PlacementTracker, (3) since 1995, there have been 6,904 PIPE transactions of which 1,846 (27%) were "structured deals" or death spirals.
It affects me on the short program lift and the death spirals.
They agreed on the types of music, the styles of choreography, and on how important it is to work not only on what we call content and elements"--the tricks, such as jumps, spins, lifts, death spirals, and throw twists--"but also on the way each move was done.
pdf According to legislative records, it was Blue Shield's own past business practices, resulting in Death Spirals for consumers, that spurred the Legislature to adopt the same 1993 law that Consumer Watchdog and Whatley Kallas, LLC now allege the company has violated.
The most generous indemnity insurance--which covered care from the doctor of your choice--was subject to an "adverse selection death spiral.
As discussed earlier, one result is thus that the most generous plan faced an adverse selection death spiral.