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Suppose GameOver Corp. has an average daily trading volume of 5 million shares and its common stock has a current short interest ratio of 10.0.
Suppose GameOver Corp. has an average daily trading volume of 5 million shares and its common stock has a current short interest ratio of 10.0. It currently has $500 million of convertible debt outstanding that is convertible into 10 million common shares. The hedge ratio on the convertible bonds is 75%. Assume that all investors in the convertible bonds are hedge funds. Based on this information, estimate the adjusted short interest ratio that would be a better representation of the current "bearish sentiment" in GameOver's common stock.
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