Behind the retiring of 10% of of these February convertibles there is a story. We won't be sure what the whole story is until it plays out, but there is a story nonetheless.

Why would you retire 10% of the offering at this point in time? I see three possibilities:

1) They've renegotiated with the existing note holders, but there were some holdouts. This takes care of the rest.

2) The company sees itself as being only $30 million short of having enough cash on hand in February to retire the notes.

3) The've completed a new debt offering but were short in placing $30 million of it. This cleans it up.

It's interesting that the price on the new shares is .45 and the stock is still at .38. The noteholders could go into the market now and buy stock less for what they are getting these shares for. What does that tell you?

The timing is also interesting. Why do this 10% deal now? Either the company thinks the stock will go lower, so they are doing this now, or Mel wants to have the February issue resolved before the Q3 conference call. I have to believe it's the latter.

If anyone else sees any other possibilities, please post them here.