Big Sphere 3D shareholder tosses activist letter in firm's lap

Cyrus Capital Partners, a major Sphere 3D shareholder, has filed a highly critical public letter calling for a full restructuring of the company to fix "cost" and "under-performance" issues. Sphere 3D is the aggregation of Overland Storage, Tandberg Data tape and disk data protection products, Snap storage products and …

[Alistair]

"Exchange certain debt of the Company (including debt currently held by Cyrus) for equity interests in Sphere or such newly-formed subsidiaries,"

I think an energy company tried that trick once.....

[Fatman]

Balance sheet 'movements'

<quote>"Exchange certain debt of the Company (including debt currently held by Cyrus) for equity interests in Sphere or such newly-formed subsidiaries,"</quote>

has both an upside and downside.

The downside, as shareholder you are lower on the asset distribution list in the event the company goes bankrupt (lenders, especially secured ones are higher up the 'totem pole').

The upside, you become a shareholder, and IF those are voting shares, you get a seat at the table determining the composition of the BoD, and final approval of executive compensation arrangements. IF you do split up the company as mentioned, you might get 'first dibbs' at the more 'juicy' parts of that corporate pie as you perform the debt to equity trade. No question that the legal accountants would be hard at work minimizing any tax consequences.