I don't know from where he get june, 7
but it is on his site.
Shareholder's meeting is in late june, isn't it ?
We were talking about stock dilution. Now you are talking about equity dilution. Make up your mind. These are not the same thing. Equity deals with assets. Is there equity dilution? Sure. Obviously the company is worth the same but now there are more hands in the pot.
Does it directly correlate with share dilution? No. The number of OUTSTANDING and TOTAL shares remain the exact same, thus the actual PPS remains the exact same until:
1) Preferred is converted to common.
2) Shareholders get scared and sell shares.
That is why there is a formula for Diluted EPS as opposed to the actual EPS.
"A performance metric used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised. Convertible securities refers to all outstanding convertible preferred shares, convertible debentures, stock options (primarily employee based) and warrants. Unless the company has no additional potential shares outstanding (a relatively rare circumstance) the diluted EPS will always be lower than the simple EPS."
So again, you changed it to equity dilution. I agree on that. I was talking about share dilution as I specified that several times.
A LIEN IS A TYPE OF DEBT, ***NOT EQUITY****. Do you not understand the difference between debt and equity? Just as senior debt has claims superior to junior, senior (preferred) has claims superior to commons. CLAIMS on EQUITY including dividends.
You can't tell me that just because they're issuing "preferreds" that it isn't diluting "commons." Equity dilution is equity dilution, the right to convert simply adds another risk variable to the valuation. Don't believe me? Compare the Fannie and Freddie Commons to their Preferreds. Not going to give a whole finance class here if you don't understand why a superior claim on a dividend stream is an "equity dilution."
The stock plummeted because of the fact that the preferred can be converted to common, then the actual shares are diluted. That doesn't mean that it has to. All it does is give them the right to. It does not mean that they will exercise that option. The preferred stock certificate does not affect the existing stock count. Could it effect the value to the share holder? Sure, based solely on the fact that it can be exercised. You seem to think the minute a preferred stock is issued, that automatically makes the common stock worth less where that is not the case.
Look at it like this. You have a home worth 500k. Someone puts a lien on your home for 100k. Does that mean the house is worth 400k? No. It means the available equity on the home is worth 400k. It means if they person "elected" to try and foreclose on your home, they would be paid their 100K, thus you only getting 400k (considering it's paid off). Or if you ever sold it, the lien holder would be paid for (just as a preferred stock). What happens when that judgement is settled? Meaning, you the home owner pays the claim to have the lien removed? That's the exact same case as Tepco buying back the preferred stock. It's a moot point.
Long story short, NOTHING is diluted until they exercise that option. The fact the stock decreases in value is the assumption that the preferred stock CAN be converted at any moment. Until then, the actual common shares remain in tact.
Yes, actually, dilution DID take place when Buffett bought into BAC. The fact that BAC price rose afterwards notwithstanding. Preferreds have senior claim on dividends to commons. And about a month after that, BAC announced it was swapping MORE preferreds to commons, thus benefitting Buffett at the expense of the common shareholder.
Any time equity is issued, it is "diluting" the existing shares already, regardless if they're preferred or commons. As preferreds have senior claim on dividends before any commons, and as preferred dividend MUST be paid before the commons can, it is absolutely 100% "share dilution." Fannie Mae and Freddie Mac were both "nationalized" with Preferreds that didn't convert into commons, yet the commons plummetted regardless because the divideds would be held up until all the Preferred dividends were paid off.
The Japanese government has advertisement the nationalization of Tepco operator for June 7, 2012 of the power station of Fukushima at the edge of the bankruptcy by naming a novel member of the directory Mr. Fumo Sudio which is also president of the directory of the NHK the largest Japanese television channel, a rather astonishing nomination in a context or operator is in prey has many criticisms to minimize L impact of the nuclear catastrophe always in progress, this nomination poses also the quality and the reliability of information which the public receives on accident of Fukushima that it is by operator or the television channel.
I couldn't find another press with juni, 7. I think also this is not a serious site. But from where is june, 7 comming ?