The way he explained it is each common shareholder would receive for free preferred shares that give 4% dividend to the holder of the preferred shares. The common shares would still get their regular dividend. Sounds like a good idea to me.
The common shareholders will receive the preferred shares. He says that it will not impact the cash horde as the preferred shares dividends would come from free cash flow. Sounds like a rational plan, but I guess we need to know more.