The fact of the matter is that the preferreds have several advantages. The first one is court. The pref. shares have contracts.
The government has been paid back more ty than 10%. Therefore, the lawsuits are there to enforce the contracts. Enforcing the 10% rate on SPS as well. You can not have one preferred holder take 100% of everything while the other preferred holders get nothing.
At a minimum, the 125 billion dollars should be returned and the SPS converted like in AIG.
The 2nd safety is the lack of dilution that Calabria has pointed out on more than one occasion.
The third is that nobody(imo)is going to invest without the majority of legal issues being settled.
The fourth is in a reorg, a capital structure must emerge. I don't see SPS disappearing without JPS being extinguished as well. Paying off one without paying off the others is counterintuitive.
The fifth is that common ALWAYS gets the pain in the end when a company is severely undercapitalized and needs to raise capital. Not preferred.
The fact that some common holders don't understand investing with a margin of safety is fine. Just don't blame us if things don't work out.
Maybe preferreds don't want commons to reach their intrinsic value before conversion date's on their contracts when they would exchange 6 to 12 preferreds for 1 common $FNMA~ $FMCC~ ? :-)
Sorry if I misled you on my reply to trunmonk, chessmaster. I was being very sarcastic when I was saying pref's are win, win, win no matter the outcome because, yes there are those on here who keep spinning things based on pure fantasy and whatever else they deem from their hedge fund leaders. I agree 100% with your post! It is how I see things also.