Subscription of convertible bonds failed. What's going on here?

The subscription of convertible bonds means that bondholders can convert bonds into corporate common stock at the price promised at the time of sale. If bondholders are unwilling to change, they can re-own the bonds until the repayment period expires, deduct the funds and loan interest, or sell them in the commodity circulation and sales market to get cash. If the holder takes a fancy to the appreciation and development potential of the listed company that issues bonds, he can exercise the equity conversion after the buffer period and convert the bonds into stocks at the predetermined conversion price, and the issuing company cannot refuse.

The interest rate of such bonds is generally lower than that of ordinary enterprises, and the sale of convertible corporate bonds by companies can reduce the financing cost. The holders of convertible corporate bonds also have the right to sell bonds back to foreign investors under certain standards, and foreign investors have the right to control the compulsory redemption of bonds under certain standards.

When bondholders will be converted into individual stocks, there are two financial accounting schemes to choose from. The book value method is selected, and the book value of the converted bonds is used as the valuation of the redeemed shares, and the income statement changes indefinitely. Those who are in favor of this approach feel that enterprises should not make a profit and loss statement because of the sale of securities, and even if there is one, it should be regarded as capital reserve or retained in the profit and loss statement. The sale of convertible corporate bonds is devoted to converting bonds into stocks. Stock issuance and bond conversion are two detailed transactions, not a separate transaction, and the income statement cannot be determined when it changes. Under the market price method, the use value of the exchanged stock is basically the more reliable one of its market price or the market price of the converted bond, and the conversion income statement is determined.

A major difference between convertible corporate bonds and individual stocks is that they have the characteristics of bonds. Even if it loses its practical significance, as a low-interest loan bond, it will still have a fixed interest expense. At this point, investors can get fixed capital and loan interest profits in the true identity of the debtor. If the transformation is completed, you will get the proceeds from the sale of preferred shares or dividends. The advantage of convertible corporate bonds lies in unlimited tension and the lowest price. When the stock price rises, investors can turn bonds into individual stocks and enjoy the profits generated by the stock price rise. When the stock price falls, it will remain unchanged, and enjoy a fixed interest fee every year, and repay the principal at maturity.