CIT Group, Inc. New Common (CIT)

[Joe Stocks]

>>Did both not "lend" money to the company in one way/shape/form?<<

Both did not lend money. The shareholders invested in the EQUITY of the company. There is no "lending" agreement. No different than if you took that $1000 and started a business of selling pencils on the street corner. You own the assets of the company. The only way you can get your money back is to sell those assets (or equity) to someone else. By investing in the company you have unlimited upside potential.

On the other hand, a bondholder lends money to the company. You as a shareholder have asked them to loan you money. The collateral is the assets you own in the company. If your company files bankruptcy and the bondholders are not paid back the money you lent them, they they have rights to collect on there collateral.

There is no little people and and big people. YOU, and I mean you, could have just as easily lent the company money and become a bondholder yourself. In fact, the internotes that CIT offered were designed for smaller mom & pop lenders.

Now keep in mind the lenders (bondholders) may have less risk, but the potential reward is limited to interest payments. You deny the people that lent you as a shareholder money then they have every right to find recovery in the assets that you pledged.

So again, you as a shareholder did not lend the company money - you as a shareholder ARE the company.

JMO.