Skip to main content
No. of Recommendations: 4
What bothers me is that at $110.21 (today's closing price) QTS-B is trading at a premium

The preferred's are protected from conversion till 2023. So, the preferred's are trading today at $52 conversion price (if you are stickler to the decimals then $51.83).

Now, think of the protection till 2023 as a call option on the stock or in much simpler terms the current preferred price assumes the stock will gain at 3.25% per year, not a big hurdle right?

2019 45.63
2020 47.112975
2021 48.64414669
2022 50.22508145
2023 51.8573966

Suppose if the stock gains 5% CAGR then you are seeing the stock price at $55 and that would value the preferred's at $116.95, 8% CAGR would value the stock price at $62, and the preferred at $131.

The worst case, you will continue to receive 5.9% or you get 5.9% and some cap gains.

What am I missing ? what is your concern?

PS: Thanks Jim for bringing this to the board.
Print the post  


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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.