patrick.net

Peter P,

several months ago, gold was bought on credit against the backdrop of a very weak USD.

Now it is completely diferent. People are buying gold with real money, not credit (because there is no credit for anything), and USD is in extreme scarcity.

Same number, completely different connotation.

OO, then I think gold may just shoot though $1000 right to the stars.

justme, but your list contains properties that are usually mutually exclusive.

Why convert to COMMON if you already have voting AND preferred?

Peter P, your ignorance shows again.

The answer is: because the preferred stock is not listed nor trading on any exchange, and has to be CONVERTED to COMMON to become a liquid financial instrument.

Now, where is the apology?

The whole point of buying CONVERTIBLE stock is of course to be able to participate in the increased (common) stock price that one hopes will result at some point after the purchase (the bailout, in our case). If the common stock never rises above the equivalent price of the preferred stock, one would not convert it.

Now, why would a common voting stock rises above the preferred _voting_ stock?

Besides, bond holders generally have seniority over even preferred stock owners.

>>Now, why would a common voting stock rises above the preferred _voting_ stock?

Because the preferred stock does not represent a claim to a percentage (share) of the assets/value of the company, rather only a fixed amount (plus any dividends that are part of the deal, of course).

Still waiting for the apology. Are you about ready now?

>>Besides, bond holders generally have seniority over even preferred stock owners.

I see no valid point in this remark.

http://en.wikipedia.org/wiki/Preferred_stock

Preferred stock has a claim on liquidation proceeds of a stock corporation, equivalent to its par or liquidation value unless otherwise negotiated. This claim is senior to that of common stock, which has only a residual claim.

Thats what I said, in not so many words. Again you have no pint.

Maybe you have a pint, but no point.

Huh?

Exactly.

Whatever. You said "preferred stock does not represent a claim to a percentage (share) of the assets/value of the company..."

The article said "Preferred stock has a claim on liquidation proceeds of a stock corporation, equivalent to its par or liquidation value..."

YES, I said

“preferred stock does not represent a claim to a PERCENTAGE (share) of the assets/value of the company…” [emphasis of the word PERCENTAGE added]

Do you understand the significance of the word PERCENTAGE here? It means that for common stock, you participate in any change in the economic value of the company. For preferred stock, you do NOT. That is why conversion rights to common stock are of the essence.

Is it clear now?