Sounds like a good hedge and I had a similar one with X,XXX P's and XX,XXX K's. However I sold my "free" 120-130,000 or so U's because I think Rosen will try another trick turning preferred against commons.
Example, They offer 20% and we jump close to that. Commons would TANK on HUGE VOLUME IMO (under .10 and possibly under 52 week low. I would then sell enough preferred to ride as many 'freebies' as I could because I'd be voting HELL NO and I'd take those profits and buy as many U's as I could. My reasoning is because I can't see this going away without all equity getting something. However it could easily take us into 2012 and why would I own U's now at .17/18 if I can get more later at lower prices. If my 'theory' doesn't happen and commons get 5.00 or more, then I'll be happy for my fellow LONGS as we party in Vegas. If commons see less than 5 it was wise for me to be all in preferreds. If we break the 52 week low in U's, I'll bet the few U longs would be happy with 2 per share, but I'd guess most would have sold. However, if my theory is correct, then I'll probably have X,XXX,XXX U's because of P's spike while U's tank
If at the end of the year my account is RED, I'll move out of my P's into K's or the other way if I've already done so, just to take a loss to counter my 2010 profits. If after 30 days we're still sitting then I'll own both P's and K's
IMO the U's could crush a HUGE PPS but only with true fear of trial. Preferreds however could go up HUGE with just the 3.7, NOLS, assets, really anything.
I'm mentally prepared to lose my investment and I was a pre-common shareholder who has learned from this whole process. :-)
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