Quite simply, people who have bonds in their hands can be converted into stocks through debt-to-equity swaps and become veritable shareholders, enjoying all the rights and interests of the company.
But it is bad news for those who hold stocks in advance, because the number of stocks will increase, which will bring certain difficulties to stock speculation.
Extended data:
1. Convertible bonds can only be converted during the conversion period. At present, the conversion period of convertible bonds traded in the market is generally 6 months after the issuance of convertible bonds to the maturity date of convertible bonds. You can convert shares on any trading day during this period.
Convertible bonds don't need to be converted into shares at any cost, so you don't need to prepare additional funds for conversion in your account.
3. Pay special attention to the fact that convertible bonds generally have early redemption clauses. Investors holding convertible bonds should pay close attention to this. When the company issues a redemption announcement, they should convert shares in time or sell convertible bonds directly, otherwise they may suffer huge losses.
Because companies generally only redeem all unconverted bonds with a very small margin (generally not exceeding 105 yuan), and convertible bonds that meet the redemption conditions are generally above 130 yuan, and some even reach as high as 200 yuan! In August 2007, investors including three fund companies failed to convert their shares in time, resulting in a total loss of more than 20 million yuan!
4. The total face value of convertible bonds applied for conversion must be an integer multiple of 1 1,000 yuan. The final shares obtained by applying for share conversion are integer shares. When the mantissa is less than 1 share, the company will pay in cash within 5 trading days after the conversion date. The redemption amount is the number of shares after the decimal point multiplied by the conversion price. For example, if the remaining 0.88 shares are converted into 5 yuan, the redemption amount is 0.88*5=4.4 yuan.
Specific operation methods of convertible bonds into shares
The procedures for converting convertible bonds into shares in Shanghai and Shenzhen stock markets are quite different, and there are several methods each.
Shanghai market 1) On the securities trading page, enter the conversion code (be careful not to enter the conversion code, otherwise it will become a trading transaction), and then enter the number of shares to be converted (the system will automatically display 100 yuan without filling in the stock price). In some brokerage interfaces, entrusted buying is also acceptable.
This is because, as long as you enter the following share conversion code, the system defaults to the right to exercise share conversion.
2) Share conversion at the brokerage counter or telephone, as above.
2. Shenzhen market
Online share conversion: on the securities trading page, select other entrusted shares for resale (the interface of each broker may be different, please consult the local broker if you have any questions), and the operation method is "Convertible bonds to shares". You can enter the share conversion code or convertible bond code below and enter the number of shares to be converted. With the Shanghai market, choose other businesses to convert shares, but only the convertible bond code can be entered at this time.
Transactions before and after convertible bonds are converted into shares.
Convertible bonds are subject to T+0 trading, that is, convertible bonds bought on the same day can be sold on the same day; Convertible bonds bought on the same day can be converted into stocks before the market closes on the same day. After 9: 00 p.m. or the next morning, the convertible bonds disappear, and the convertible bonds appear, and the shares can be sold the next day (T+ 1).
References:
Baidu encyclopedia-convertible bonds into shares