(03-10-2022, 06:00 PM)CY09 Wrote: Hi snowball,
You are absolutlely right. This is how convertible bonds work. When up, dilution to shareholders as bondholders will want to convert for they are in the green; share prices are lower than exercise price means bondholders will want a cash redemption.
I have been keeping track of Sea Group and knew they had 2025 and 2026 convertible bonds, but not the earlier tranches. Do you have the 2023 and 2024 convertible principal amount? Because i am trying to calculate the potential dilution and cash burn redemption amount they may have to set aside
Thanks for your advise.
I am not very sure how to read.
As of Dec 2021, the convertible notes on BS is stated as US$3,475,708.
This ballons to US$4b+ as per Jun 2022.
The shares being converted in 2019 is 45,645,884,
2020 is 27,406,818, 2021 is 20,039,849
This seems significant amount for a company with 557m shares? (Dec2021)
The principal amount i saw on note 14 is
2023 Convertible Notes (CN): US$575M
2024 CN: US$1,150M
2025 CN: US$1,150M
2026 CN: US$2,87M
With the balance sheet Dec 2021, it state the amount
2023 CN: US$28M (vs US$41M Dec 2020)
2024 CN: US$131M (vs US$916M Dec 2020)
2025 CN: US$928M (vs US$882M Dec 2020)
2026 CN: US$2,387M (vs US$0 Dec 2020)
Total: US$3,475M as earlier mention and this amount increases to US$4b in latest 2Q reportinig.
I not sure how to read this.
It seems like after converting, how much is the principal amount left?
But how come for 2025 CN, the amount on Dec 2021 is higher than Dec 2020?
For the 2Q reporting, I did not see breakdown of the US$4b figures?
Another question is for 2026CN which carries strike price US$477.01, why is there only US$2,387M? (vs principal amount US$2,875M)
SE price never go above US$400, how come there is a reduction of US$500M?
Another possibility is they value it to market or something, because not likely to be converted so they assign a lower value?
In any case, it seems like cannot tell how much of the notes, the principal amount is outstanding.
So we can see the amount they have to redemn in the coming years, which will affect cash flow.
The 2025 and 2026 tranche principal amounts adds up to US$4B, so it seems significant. (and their strike price US$90.46 and US$477)
I not sure how Shopee can generate cash in the coming years. South East Asia is a big market, true enought, but is different culture, law, language etc in all the 10 different countries, unlike a big market in US (Amazon), Europe (Ebay), China (Taobao), where those ecommerce companies are profitable.
The biggest market in SEA is Indonesia, but it seems to be facing a big fight with an Indonesia player with better business networks through their family.