A convertible note is debt that can be exchanged for equity on stated terms. The manipulation risk lies entirely in the conversion formula: a fixed price is benign, a floating discount to market is not.
manipulation techniques · updated 2026-09-08
Where does convertible note come up?
This term is used in the following manipulation techniques, each explained in full on
its own page.
Dilution death spirals— A death spiral is a convertible instrument that converts into stock at a discount to the prevailing market price, so each conversion dilutes holders and pushes the price lower, entitling the holder to still more shares.
See also
Death spiral financing— Death spiral financing is a convertible instrument that converts into stock at a discount to the prevailing market price, so that …
Dilution— Dilution is the reduction in existing shareholders' proportional ownership when new shares are issued. It is a normal consequence …