$Faraday Future Intelligent Electric(FFAI.US)

For FF (FFAI/formerly FFIE), the reason it didn't convert shares when the stock price was $1–3, but did so in large volumes only when it dropped to $0.2–0.3, is fundamentally the result of overlapping factors: contract terms, conversion price adjustment mechanisms, creditor strategies, and the company's life-or-death gamble. It's not "intentionally waiting for a low price," but rather that conversion could only be triggered at a low price.

1. Conversion isn't possible just because you want to: It's locked by the conversion/floor price.

- Most of FF's convertible notes (SPA notes) have a fixed conversion price or a minimum floor price:

- 2022: $2.2865, $2.69

- End of 2024: $1.16

- March 2025: $1.048

- Stock price > Conversion price: Creditors would lose money converting (same debt for fewer shares), so they absolutely won't convert.

- Stock price falls far below the floor price: Only then is an automatic downward adjustment triggered / conversion at a market price discount (commonly 90% VWAP).

- Conclusion: At $1–3, the price was mostly above the conversion/floor price, making conversion impossible; only when it dropped to $0.2–0.3 were the conversion conditions met.

2. For the company to lower the conversion price, it must agree only at a life-or-death moment.

- Lowering the price = same debt for many more new shares, severely diluting existing shareholders.

- At $1–3: The company still wanted to support the stock price, avoid delisting, and negotiate new strategic investments, so it refused to lower the price.

- At $0.2–0.3: On the brink of bankruptcy/delisting, with no conversion meaning debt + interest repayment at maturity (FF simply has no money).

- At this point: The company is forced to agree to a significant price reduction, and creditors get shares at a rock-bottom price.

3. Creditors intentionally depress the price / wait for a crash: To maximize share count.

- Creditors knew FF had high interest + broken cash flow, so the stock price was bound to fall.

- Converting at $1–3: Few shares, selling wouldn't yield much profit; converting at a few dimes:

- Debt converts to dozens of times more shares ($1M debt @$0.2=5M shares, @$2=500K shares)

- Obtains an absolute controlling stake, clears out old shareholders, replaces management.

- Classic vulture investing: The lower it falls, the more you profit.

4. US stock rules + reverse splits + authorization limits

- Nasdaq's **$1 delisting threshold**: At $1–3, the company was maintaining compliance, not doing reverse splits.

- Dropping to $0.2–0.3: Must reverse split + increase authorized shares to issue the massive number of new shares for conversion.

- Previously, there weren't enough shares authorized; even if they wanted to convert, they couldn't issue the shares.

5. In a nutshell

It's not "insisting on waiting for a low price," but that the terms didn't allow it and the company wouldn't permit conversion at a high price; only when it dropped to the brink of bankruptcy did the terms trigger + the company was forced to agree + creditors maximized their gains, leading to concentrated conversion.