Midway reduces the conversion price for its bonds, signaling further stock problems.
Midway Games Inc. (MWY) announced an adjustment to the conversion rate for its 6 percent Convertible Senior Notes. Effective April 30, 2007, the new price for converting a note is $10.00, lowered from its previous $17.75 per share of common stock mark. Registered note holders, Wells Fargo Bank, and the National Association were all updated of the modification in the conversion rate.
Convertible Senior Notes are bonds issued by a company that can be exchanged for stock at a certain price point. The lowering of the conversion rate is another sign that Midway's stock is on a downward spiral and it can not sustain bond notes at $17.75. Shares closed at $6.99 yesterday and have fallen seven percent in the past week of trading.