Dilution - Dilution - Dilution! Government gets warrants in C!

[wareco]

For your reference:

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

The issue was not whether the warrants are dilutive. Clearly, they are. The issue was whether the $20B preferred was dilutive. Since they apparently are not convertible preferred shares, I still argue they are not dilutive.

 

[bond tr4der]

Quote from wareco:

For your reference:

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

Why the hell would you source Wikipedia.

 

[wareco]

Quote from bond tr4der:

Why the hell would you source Wikipedia.

I'm still waiting for you to explain how the preferred is dilutive.

 

[riskfreetrading]

Quote from wareco:

Well, its late and I really don't want to debate the issue, but if a company sells $20B worth of preferred stock and receives $20B in cash, that in effect, is a wash. $20B in new assets, and $20B of new liabilities. So, tell me, specifically how has the value of the common stock been diluted?

Remember that government receives 8% dividend/interest . This has to be paid. It can be dilutive depending on increase if earning as result of deal is less that interest/dividend paid.

In near term it should be dilutive, but long term it would not. Since stock is a perpetual option, I would expect stock to rise tomorrow.

 

[mokwit]

It would be potenmtially dilutive to dividends as it would be paid in preefernce i.e having forst claim on cash available for dividend payout and thus leaving less cash flow available to common. Not a problem if C was awash in cash, but clearly it is not.

 

[newguy05]

why you guys arguing this? who the fuck cares. All that matters is if the news will stabilize/push c up from the current $3 level, or not.

I am pretty sure it's very positive news and will push the stock come monday.

Wait and see.

 

[BlueHorseshoe]

Quote from wareco:

I'm still waiting for you to explain how the preferred is dilutive.

1. Preferred interest payments are usually CUMULATIVE, so that severely curtails the common share's ability to receive dividends. (Cumulative means if, during loss-making years the preferred interest is not paid, C must pay it in arrears before ever paying a dividend on common.) In that way preferred shares DO retain shareholder-like rights to participate in profits.

2. It is specious to separate the preferred from the warrants because they are part and parcel of the same deal - just like Buffet got w/ GS and GE(?).

 

[bond tr4der]

Quote from newguy05:

why you guys arguing this? who the fuck cares. All that matters is if the news will stabilize/push c up from the current $3 level, or not.

I am pretty sure it's very positive news and will push the stock come monday.

Wait and see.

Turn on Bloomberg. Shittygroup is down 88 cents in Germany to $2 and change.

 

[BlueHorseshoe]

Quote from newguy05:

why you guys arguing this? who the fuck cares. All that matters is if the news will stabilize/push c up from the current $3 level, or not.

I am pretty sure it's very positive news and will push the stock come monday.

Wait and see.

The point is one can no longer look backward at the C chart and get any foothold on what the chart might look like going forward, because the shareholding structure has been dramatically altered. C will trade differently now than it might have had it simply sold off and then bounced.

 

[athlonmank8]

Quote from bond tr4der:

Turn on Bloomberg. Shittygroup is down 88 cents in Germany to $2 and change.

lol WTF......Europe isn't open yet