Sterling, you skipped the second part of that sentence though: "or additional shares will be issued to compensate for any shortage." This creates a huge loophole allowing preferred to be converted and dumped at any price w/o penalty.
As for EPS, you've been focusing on Basic EPS and ignoring the overhang. Diluted EPS is a far more accurate estimation of total earnings per share. Per the 10K, the amount of diluted shares is over 33.7B. Who knows why they've been reporting basic and diluted EPS as the same. One has to question whether their independent accounting firm is incompetent or doesn't exist.
These guys have a very, very long track record of massive dilution. Can't erase it. Canceling stock is pretty meaningless in pennies. They can cancel a chunk one minute and start issuing another chunk the next minute or day. Plenty of examples where this has happened. A better sign they've changed ways is by lowering the a/s and getting rid of all or most of that overhang. Even then, an outside investor needs to keep a very close watch.
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