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Strategies & Market Trends : Strictly: Drilling II
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To: isopatch who wrote (4116)11/17/2001 4:32:21 AM
From: brent hyatt  Read Replies (1) of 36161
 
My point was the preferred has no conversion leverage now or in the future. With the preferred at 40+, the common would have to 80ish for the preferred to have a convert value. There is no dollar figure on the common for conversion, strictly one preferred for 1/2 common. 7% is not a bad yield, but to miss most of the capital gain in the event of a huge runup in the common, would be of little solace. To introduce options as a vehicle to participate in capital gains may be viable for some, but certainly most buyers of preferreds do so for income or risk aversion.
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