Bove's "dilution delusion"hypothesis is, again, based on at least 2 false assumptions. When you base a hypothesis on false assumptions, the entire hypothesis is refuted.
Example:
If I "assume" each preferred shareholder will buy a lottery ticket and win a million dollars on each share, that entire premise that "each preferred shareholder will exchange his shares worth 9 bucks for $1,000,009 in cash, based on the false premise of "each shareholder will win the lottery with each share". Since that wont be happening, the entire hypothesis fails.
In a similar way, Preferreds base their "dilution delusion" on the premise that "new investors of new shares" will donate their hard earned dollars to the US Treasury by buying new shares in a company where the old shares had all their money robbed by the US Treasury.
Why would anyone WANT to buy "hot" stocks, where the government just robs your money? You may just as well donate your money to the US Treasury!!
Again, Bove's "dilution" 80-90 percent, assumes the US government will entice more "investors" (aka US treasury donors) to buy new shares. People are not turkeys!! I am personally offended Dick Bove suggests I am so stupid, I will buy "new" shares of FNMA after the old shareholders were robbed blind.
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