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Bank of America Corporation Message Board

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  • yourdeadmeat69 yourdeadmeat69 May 6, 2009 8:44 PM Flag

    Dilution of all common with converted preferred, and stock goes up?

    Uhh, so,,, that's four to one so far drinking cool aid and enjoying the flavor.

    Comments like who cares if they dilute, show no knowledge of value, as if banks were some momo tech stock. Okay, let's make believe we can defy gravity, and not "dilute" stock by issuing 3X the shares.

    And yes, the stock that is owned by the US govt is preferred and will be converted to sit along your float as common shares, maybe three to one.

    But, let's say it isn't all converted. Let's say this is Monopoly and you've landed on Federal Land, and you have to pay extra for that hotel. So you don't have the money, so you have to mortgage one of your properties, a China Bank that used to be a big money maker if the other players landed on your square. So, if I took the value of what's left, you have some money, you lost your valuable rent getter, you have to dilute some, not all of your common, meaning more shares chasing as many buyers (that's what dilution is)

    And this is going to make the stock go up? Do I understand this correctly?

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