Yep people pointing to the PSPA language saying the government cant convert its senior preferred shares to common shares are missing the fact that the governments senior preferred shares in AIG had the same exact language, and guess what happened there? You guessed it, the government converted its senior preferred AIG shares to common shares which caused >92% dilution.
"The plan, which won the blessing of major credit-ratings firms before it was announced on Thursday, involves converting $49.1 billion of preferred shares that the Treasury holds in AIG into common shares and increasing the government's ownership stake in the company to 92.1% from 79.8% currently."
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