Whirligig
I do not think the PPS will have anything to do if the preferred shareholders get paid. It will be all about profit. The offer tells me that the company is really certain that it is profitable enough to make good on the offer and that silently speaks volumes.
I realize perfectly well that status quo; the profit on non-certed shares could probably exceed the cert deal if everything is on the up and up. There are unknowns though (imagine that) that make the offer very interesting and could nullify concerns of profit.
The shares are "voting" shares. How that makes them unique in the long run is the unknown in comparison to common shares. Will preferred always equal 167 votes? Will it rise with the PPS on a sliding scale? Will the par value from the company rise with the PPS? Can or will they tender special dividends to preferred shareholders? Will they release the hounds, boost the PPS well over .06, send us a check for $10 per share and say “have a nice day”?
It is definitely not a bad offer as is and again, I think they will make good on the terms. I would never send in all of my shares. All I ever wanted from this stock is to at least break even on a very small percentage and forget about the rest for quite some time.
I would have absolutely no problem with sending a percentage of shares I would not be selling anyways for preferred shares that pay a quarterly divvy and any other perks for being preferred. I just can not bring myself to do it without knowing a little more about what I will be tying my money up in for potentially 5 years. I have already taken a risk by buying and holding for as long as I have. If I had a lot more shares, I might think a little different, but I do not own several million shares.
I personally think the offer was to appease some of the disgruntle holders, give some credibility to claims that the company is fairly profitable and to get those shares out of the float and hopefully increase volume so that the buyback on the open market would move faster in tandem. The offer tells me that the plan to buy, buy and buy some more has possibly changed to buy, buy and give the shareholders a bone. This old stock might be rolling "soon".
If not, I already chalked it up as a loss before I made my first purchase and I can rest assured that it will not be any worse than that.
Regards,
Fizzlegig
