American Rare Earths and Materials Corp. (fka AREM)

[nala500]

My 2 cents (and maybe all I have left if this is bad)

My take is that the preferred shares were valued at $17 a share and they had about 58,000 of them (for easy reference). If they wanted to convert them then they get 100 shares for every 1 share that they have but obviously the price comes down. Now, whether 17 cents was a price they picked before hand or if it is based on an average I do not know. But, if they got 17 cents per share for the now 5,800,000 shares that they have of common stock it would be worth $986,000. (and the $17 * 58,000 = $986,000) But, the price now is 13.5 cents per share so it’s now worth $783,000. They already took a $200,000 loss to do that. So, they either think 1. the price is going to be going up and over 17 cents a share and they’ll make a ton more money by converting the shares now or 2. the stock is going to tank and they are getting whatever they can out of it and the almost $200,000 loss right off the top is acceptable. (which is really scary for those of us holding shares)

Any other thoughts, corrections, suggestions? I'm not a pro at this, either.