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Doral Financial Corp. Message Board

  • talkshow55 talkshow55 Apr 14, 2013 1:06 AM Flag

    How does a reverse split effect the preferred issues??

    There was big volume on DORLN on Thursday,4,11,13. It looked like a block trade of 135000 shares

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    • It doesn't effect the preferred directly. Indirectly it's somewhat beneficial for the preferred. Preferred holders would like to see the company raise capital. A higher share price is preferable to institutional investors and makes it easier to potentially raise capital.

      Note however, that I don't expect that DRL will raise capital anytime soon. They really don't need to and they don't want to with their stock trading at 13% of adjusted book value.

      • 1 Reply to don_t_panick
      • like panic said it doesnt really - you might be confusing a capitol raise where the common would be diluted - now that would be good for the pref

        in more of an indirect way it is good for the pref because the common is being messed with and the pref is still the exact same terms - market uncertainty if you will
        I hope the market reacts negatively and I can but some common at more of a discount

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