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Non-Tech : Income Investing

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To: E_K_S who wrote (34181)7/11/2018 10:28:43 PM
From: Gridbird1 Recommendation

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E_K_S

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Re: Do not own or follow but just saw FPI off 15% plus..? Tariffs?

EKS, here is something to consider.....

Preferred Stock Trader, Contributor
Comments (1133) | Following

For those looking at the FPI preferred stock, in the Pannick Report chat room, Richard Lajeune noted that in the propectus for FPI-B preferred stock (covenant on page S-48), the preferred can be forced to convert to common stock with a cap of 5.7 shares of common per preferred share. Thus if the common stock of FPI should get down to $2.00 per share, for example, FPI could redeem each preferred share for $11.40/share of common stock which would help get the preferred off of their books and really put a hurt on preferred shareholders. So the common stock price performance can impact the preferred stock at some point if things deteriorate at FPI. It isn't strictly bankruptcy or insolvency that preferred stockholders need to worry about.
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