| (in pair skating) a dramatic movement in which the man spins his partner around him in a gradually increasing radius while he spins in place, holding the extended arm of the woman, who revolves around him on one skate with the other leg stretched out and gradually lowers herself backward until she is just above the ice surface. |
Death Spiral
A type of loan investors lend to a company in exchange for convertible debt, which, like a convertible bond, typically has provisions that allow the investors to convert the bonds into stock at below-market prices. This can lead to the original shareholders losing control of the company.
Investopedia Commentary
This type of loan is undertaken by companies that desperately need cash. It is called a death spiral because companies' stocks often plunge drastically after they take on these types of loans. Investors can short the company's stock and try to drive its price down. The falling price results in more shares for the investor who chooses to convert. The short position can be closed out with the shares received from the conversion.
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See also: Convertible Bond, Convertibles, Credit Cliff, Short
death spiral