I agree with your assessment to some extend. The common share price as off today values Box Ships at around 2.3 Million which I think is too low. I do agree that the main reason for this to not trade higher is the hidden fear of outstanding toxic shares and the possibility of more toxic notes in the future. The good news is that no matter how many toxic notes they issue, it will not negatively impact the preferred. It may even help the preferred because it improves the cash position while diluting the common.
I personally think the preferred is the better bet because the upside is 6-1/2 times today's value of $4 plus a nice 50% annual perpetual dividend that accumulates even though it is not paid right now. If you believe that the company still has 2.3 Million in actual value, the preferred should be trading at $25. I am not so sure that the the common shares have more upside. I have a hard time justifying a valuation of 13 Million (6-1/2 times 2.3 Million). My estimate for Box Ships 2016 revenue is 21 Million with a 5 Million EBIDTA loss. For 2017 I can only come up with 15 Million in revenue if rates stay where they are at now. The real recovery I don't expect until 2018.
The only reason the preferred is trading at $4 is because of the Grey Market environment that allowed very few low volume transaction of panic sellers drive the price so low. The difference between the BID and ASK is so huge that a 100 share transaction can cause multi dollar price swings. Unfortunately there are not many sellers left. If have tried buying this as high as $10 and couldn't clear.
The only risk for the preferred is bankruptcy and liquidation and even then I believe that you are better off with the preferred. Just my humble opinion.
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