UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: goldnail Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Re: Bank of America Preferreds Exchange Offer Date: 6/6/2009 4:00 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Please help me out:

I'm new to these exchanges. I bought BAC preferred J at $5.50, with a huge corresponding interest rate at that price. The stock has since more than tripled. I am still getting a great interest rate of over 10%. Stock price today is over 18, and the exchange offer is for $18.75.

What possible advantage is there for me to exchange for commons? Seems like I have a great deal. What are the risks of holding the preferred? If they go down, the interest rate goes up. If they go up, they go up.

If I want to book the profit, what is the difference between just selling the preferreds vs. exchanging, then selling the commons? Wouldn't the commons be diluted by the exchange and thus begin to lose value?

I would appreciate someone's wiser experience here.

Thank you.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next


Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:

Wal-Mart Nixes Apple Pay
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.