For those of you with some interest in the past, the subject of the IMPAC Holdings Preferred stock might raise the hair on the back of your necks. During the depth of the financial crisis, IMH management put a gun to the head of the common and preferred share holders: either allow us to buy back the preferred at pennies on the dollar, and stop paying the dividends on the people that refuse to be blackmailed, or we will go bankrupt. May people did tender their preferred, and the money saved saved the company. But a lot of people did not tender their preferred, and those shares are still out there. What is interesting is that Preferred still has an intrinsic value of $25 per share: In the event that the company is dissolved or taken over, the holders of the preferred must be paid BEFORE any of the Common Shareholders. So when ou look at the book value per share, for tis company, that book value does not apply to your common shares directly, it only applies AFTER you subtract the money due the Preferred Shareholders. I suggested to the Board that theybuy these shares in and clear off their balance sheet, but there has been no response so far.
No, They did no wipe me out. It was not a major holding, except in my now non-existent IRA. I am fine. However this company is NOT fine. Their Mar, 2011 Quarterly report shows some deterioration, and a return to losses. If this "Double Dip" in housing persists, bankruptcy may begin to loom again, and the only value in the company will be the preferreds, not the common..
Disclosure: I SOLD all PFD and Common shares in Impac long ago, except for one share per account to make it easier to keep track of their prices. From time to time I purchase shares on a short-term trade.
no need to buy back perferred and waste money they will never receive divs again and are worthless .On the other hand the commom can and will receive divs.And as to your examlple it only makes sense if they were to go bankrupt and they have proven to me they are much better managers then most give credit.The company will continue to grow,be it slow but they will survive and when this administration is gone the true economy an the ability to earn money on ones honest ability will shine once again.
They have survived so far, but their survival is not assured. With the "Second Dip" in housing, their concentration in California and the west, and their recent Q1 2011 loss, they are still extremely vulnerable. At present there is no "real" value in the common due to the preferred on the balance sheet.
I will not be holding any more shares until I see some real progress. (Though I might trade from time to time)
There is nothing hidden about the PFD stock....I think that horse has been beaten dead at this point. There are several options that could be used in handling the PFD's and I beleive that management will handle it when they are able to. Right now the focus is to strengthen the business.