Bluecon Posted December 8, 2006 Share Posted December 8, 2006 "Shares of Ford Motor Co. plunged again on Thursday as investors fled the company's regular shares in favor of a $4.5-billion convertible bond issue that analysts said offered better returns for less risk -- a view colorfully articulated by a popular TV host." "The 30-year convertible bonds -- which Ford raised from $3 billion after strong demand from Wall Street -- offer several advantages over Ford's common stock. While Ford's stock dividend has been eliminated, the bonds pay a 4.25% interest rate. The bonds can be converted into shares if Ford's stock prices rise to between $9.05 and $9.20 a share; at those prices, some 500 million more shares could be added to the 1.9 billion Ford shares already on the market, diluting the value of the shares outstanding today." "And were Ford to declare bankruptcy, the bondholders would be a step ahead of regular shareholders for a share of the company's assets. The convertible bond even includes a form of insurance for the bondholders in case Ford brings back its dividend." http://www.freep.com/apps/pbcs.dll/article.../612080337/1014 Quote Link to comment Share on other sites More sharing options...
g48150 Posted December 9, 2006 Share Posted December 9, 2006 Exactly, why buy the cow when you get the milk for free. They (my buddies) tried the same logic on me when they (tried) to talk me out of getting married. Quote Link to comment Share on other sites More sharing options...
Edstock Posted December 9, 2006 Share Posted December 9, 2006 Bluecon, what is Ford desperate about? Quote Link to comment Share on other sites More sharing options...
dave9991 Posted December 9, 2006 Share Posted December 9, 2006 Bluecon, what is Ford desperate about? 2007 UAW negotiations, and a possible strlke that could bring the company into bankruptcy in a matter of weeks. Quote Link to comment Share on other sites More sharing options...
xr7g428 Posted December 9, 2006 Share Posted December 9, 2006 Looks like it is time for the Ford common stockholders to sue. On top of all of the other losses, they just took at least another $3.5 Billion from the holders of common stock (not the Ford family). Watch for the class action suit. Mullaly will be wearing his ass for a hat when this is over... Quote Link to comment Share on other sites More sharing options...
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