Before I get to your specific questions, I wish to remind readers that we first recommended STRM back in April 2011 at $1.85 per share. With the stock price now up over 100% since our first report, we are obviously no longer bullish on the shares and do not think the risk/reward profile is attractive. At best, the risk/reward is neutral.
That being said, in terms of your questions, re: convertible debt, according to a recent SEC filing for STRM, the $3 million convert has been converted into 1,529,729 shares of common stock. As for the potential of an acquisition of STRM, by a larger company, I do not think it is likely at the current juncture. A more probably scenario is that STRM will use it's higher stock price to pursue additional acquisitions. This is partly why I am no longer bullish on STRM: I do not like to invest in acquisition-driven growth companies, as the risks are enormous for integration missteps. I would say the main problem with STRM now from a risk perspective, is that the nature of STRM's business is that revenues can be lumpy, as the company pursues large contracts that take time to close. As such, the odds of a quarterly earnings disappointment are now high, and could lead to a price decline in the stock, given the much higher valuation. Of course, should there be any quarterly disappointment, the stock could again become attractive on a risk/reward basis, depending on the price.