Regarding the risk of small and micro cap stocks, we have another observation dimension, that is, convertible bonds.
Although a convertible bond is a bond with equity attributes, it is still a bond.
Since it is a bond, the first thing to consider when investing is credit risk.
That is, whether this company will thunder or something.
For convertible bonds, in addition to thunderstorms, delisting is also a major risk.
Since the bond market is mostly made up of institutional investors, they are more rational.
Therefore, the stocks behind the convertible bonds that are disliked by institutions are worthy of high vigilance.
Let's start with a picture that bears witness to history.
On April 16, the small and micro market plummeted, and there was a rare scene in the convertible bond market, as the underlying stock trend continued to weaken, and the price of many convertible bonds fell below par value.
On April 16, there were as many as 60 convertible bonds that fell below par value, accounting for 11.19%.
On April 17, with the rebound of small and micro market profits, the price of some convertible bonds returned to above 100 yuan.
However, as of the close of trading on the 17th, there were still 53 convertible bonds with prices below 100 yuan.
That's where we pay attention.
Because institutions are hesitant to convert bonds, the risk of delisting is much greater!!
Due to the imperfect delisting system before A-shares, convertible bonds rarely encounter delisting risks.
There was a previous case that broke the record, and that was the Soute convertible bond.
Let me take a look at the situation of this debt conversion. Then let's take a look at what convertible bonds are hinting at the delisting risk of the underlying stock.
1. The past and present life of Sote Convertible Bonds
On April 9, 2020, Sote convertible bonds were listed with an opening price of 110.016 yuan;
On March 3, 2022, the highest price in history was 130.48 yuan.
On April 25, 2023, the underlying stock of Sote convertible bonds was capped*ST, and the next day, the price of Sote convertible bonds fell by 14.3% to 63.55 yuan.
On May 22, 2023, the price of the underlying stock was lower than 1 yuan for 20 consecutive trading days, triggering the delisting condition, and Sote convertible bonds simultaneously waited for delisting and suspended trading, closing at 19.002 yuan.
On July 21, 2023, the Shenzhen Stock Exchange decided that the Soute convertible bonds will be delisted after 15 working days.
On August 11, 2023, the Sote convertible bonds were officially delisted from the Shenzhen Stock Exchange and are expected to be listed on the Old Third Board within 45 working days.
Before October 18, 2023, investors need to complete the confirmation of convertible bonds, and only after completing the confirmation can they see the Sote debt refund of the Old Third Board in their positions.
On October 20, 2023, the price of Sote Bond Withdrawal was listed for trading, and the price of delisting from the Shenzhen Stock Exchange was 18.002 yuan, but the closing price on the first day of the Old Third Board was 3.435 yuan, a plunge of 80.92%.
At the same time, on this day, Soute can start to convert the debt to shares, and the deadline for the transfer of shares is March 12, 2026.
On November 15, 2023, the downward revision of the conversion price of Sote Bond Surrender was lowered, and on December 11, the downward revision was successful, and the conversion price was lowered from 1.6 yuan to 1.1 yuan.
How's that, isn't it exciting?
What is the price of Sote debt surrender now?
April 17 is 6 yuan.
咦，从3.435元涨到6月，能赚75%呢。
Haha, don't be naïve, is there such a good thing?
The trend chart of Sote debt repayment is like this.
See how violent the price fluctuations are, the lowest is only 0.001 yuan, and the highest is 24.755 yuan.
This kind of discrete K-line is caused by a serious lack of liquidity.
In other words, don't think you can make this difference, you can't sell an asset without liquidity.
I saw a stupid fork in Sote's stock bar actually posted such a post:
It made my stomach hurt with laughter. It can be seen that there are a lot of gamblers on A-shares.
The turnover of Sote debt repayment is 20,000 or 30,000 yuan a day, and sometimes even only a few thousand yuan, who are you selling to?
There are also debtors who tearfully wrote a long article:
2. What are the convertible bonds that fall below par value?
As can be seen from the chart below, most of the ones that fall below the face value are small micro disks. The circulating market capitalization is very small.
And most of them are companies that have been listed after 2020.
It can be seen that among the newly listed companies in the back, there is really a lot of garbage.
Stocks in the CSI 500 and CSI 1000 rarely fall below par.
It's just that the establishment is voting with its feet.
We need to be more wary of institutional voting because they are more aware of the quality of the company.
Moreover, with the deepening of reform, there will be more and more companies at risk of delisting in the future.
Although the management has left a certain buffer time, the listing of garbage companies is to make money, and many of them cannot achieve any results.
Let's take a look at the CSI Convertible Bond Index, since the rebound in February, the trend has been very stable, why?
Because most of the weighted debts in the CSI convertible bonds are companies with better quality.
3. Everything will become history
In the past, there were almost no ghost stories of convertible bonds until Sote Convertible Bonds broke this record.
And records are meant to be broken.
This means that this will happen all the time in the future.
Once this kind of thunder is stepped on, the magnitude of the loss will be beyond imagination.
I've talked to you about penny stocks before.
Penny stocks usually plummet first, and then go all the way down.
To put it bluntly, first use a sharp knife to poke a few times, and then switch to a blunt knife to cut the meat.
The reward is voluntary, and 1 cent is silently supported, haha!
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