Floorless Preferred Stock/Debenture Message Board

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Strategies & Market Trends : Floorless Preferred Stock/Debenture

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To: Zeev Hed who wrote (179)	11/26/1998 1:49:00 AM
From: George Dawson	Read Replies (1) of 1438

Zeev, et al: In my quest to be a better investor should I be fleeing from any company that has issued convertible debentures as well as floorless covertible preferred stock? It seems to me that the shorting mechanism is still in effect. That is you can deliver either the preferred certificates or the debenture certificates to short against. The only difference being that with the debenture, you need enough leverage to drive the stock price down and then cover with inexpensive shares accumulated at market price rather than with inexpensive conversion shares (assuming the conversion on the debenture is fixed at a premium to the market price). All this happens while collecting interest until maturity. Does this sound accurate to you? George D.

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