Spansion Inc. Message Board

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Technology Stocks : Spansion Inc.

CY 23.82

0.0%

Apr 16 5:00 PM EST

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To: bobs10 who wrote (3711)	4/3/2008 12:07:21 AM
From: Biomaven	Read Replies (1) of 4590

Well, it's worth 6.5% of the stock unless they renegotiate No it's not. For one thing, they probably get a dividend which the Common does not, and their liquidation preference is clearly worth something as well. I analyze deals where a convertible preferred that is convertible 1-1 into common actually turns out to be worth nearly twice as much as the common because of the cumulative dividend and liquidation features (and that's ignoring anti-dilution features because they are too hard to value). Intel and STM have every incentive to maximize the apparent value of this deal - that's why we are not hearing about the additional goodies that the preferred get. Here's a description of one methodology for allocating value between multiple classes of stock: aicpa.org Peter

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