SandRidge Energy, Inc. (fka SDOCQ)

[Porgie Tirebiter]

At first glance, I also would rather see them retire debt or a block of preferred shares than buy back common shares.

However, consider this..... To retire preferred shares and/or bonds yielding 7 to 9% in today's interest environment you're going to have to pry them out of the holder's cold dead hands (ie; buy them back at a highly inflated rate). The only thing that could make the debt holders want to bail early would be if they began to worry they may not redeem for full value at maturity and that does not seem to be the case.

So here's the choice: Buy back discounted commons, or retire highly inflated preferred shares and bonds.

This is what Lee Cooperman sees that the author of the S/A article is overlooking.