Post R/S, are preferred shares going to be worth 100x more?
Looking for educated opinions (read: someone smarter than me to tell me why this is right or wrong). I've gone back & forth on twitter with SR over this. He states preferred will not be worth more post R/S because commons are affected equally. When I press for more specifics he ignores further tweets.
His statement makes no sense to me whatsoever because the 14C clearly states preferred will not be affected by the R/S (only commons will be affected). I read this to mean that preferred will still be convertible for the same number of commons post-R/S as pre-R/S. If that's the case, preferred shares (namely SR's & GP's) will be worth 100x the value post R/S.
Thoughts? Paragraph in question is in page 4 of the 14C (bold emphasis mine):
"The Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company or proportionate voting power, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share. All stockholders holding a fractional share shall be issued an additional share. The principal effect of the Reverse Stock Split will be that the number of shares of Common Stock issued and outstanding will be reduced from 131,404,554 shares of Common Stock as of the Record Date to approximately 1,314,046 shares (depending on the number of fractional shares that are issued or cancelled). The Reverse Stock Split will not affect the shares of Series E Preferred Stock of which 4,350,000 are issued and outstanding and/or the shares of Series F Preferred Stock of which 3,450 are issued and outstanding and/or the shares of Series G Preferred Stock, of which no shares are issued and outstanding. The number of authorized shares of Common Stock and its par value will not be affected."
