Comstock Holding Companies Inc (NASDAQ: CHCI) is climbing in the market today, gaining in multiples rather than percentages. So, what’s the reason for the gains? Ultimately, the gains are the result of the conversion of debt. Of course, with debt converted, investors are excited and sending the stock screaming for the top. Today, we’ll talk about:
- The debt conversion;
- what we’re seeing form the stock as a result;
- and what we’ll be watching for with regard to CHCI ahead.
CHCI Announces Conversion Of Debt
As mentioned above, Comstock Holding Companies is having an incredibly strong start to the trading session this morning after the company announced that it has converted debt. In a press release issued early this morning, the company announced that it has converted a majority of its unsecured short-term debt into the company’s existing Series C Non-Convertible Preferred Equity. Also, the company said that it has secured an extension of up to two years of $5 million of its remaining unsecured corporate debt.
As a result of these transactions, CHCI will have greater financial flexibility. Not to mention, these transactions enhance the company’s working capital position as it continues to work toward its strategic transformation out of for-sale homebuilding and into commercial development, asset management, and real estate services. In a statement, Christopher Clemente, Chairman and CEO at CHCI, had the following to offer:
This conversion of unsecured, short-term debt is the next step in positioning Comstock to achieve our primary objective of enhancing financial performance and shareholder value… By deleveraging our balance sheet, we will improve our working capital position and support the strategic initiatives that are at the core of our recently announced operating platform transformation. I am excited about the prospects for our Company and look forward to reporting our progress in the coming months.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In the case of Comstock Holding Companies, the news proved to be overwhelmingly positive. After all, what investor doesn’t like to see an improved financial position? With the news in mind, it only makes sense that excited investors are sending the stock toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:26), CHCI is trading at $4.35 per share after a gain of $2.33 per share or 115.35% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CHCI. In particular, we’re interested in following the story surrounding the company’s ongoing restructuring out of the built-to-order homes business and into the commercial development and services space. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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