| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 3182.1 | | TOOK::DELBALSO | I (spade) my (dog face) | Fri Jun 17 1994 14:31 | 6 |
| I'm no financial whiz kid.
Does this mean what it sounds like it means? That holders of the new preferred
stock are about to be paid a dividend by a company which is losing money?
-Jack
|
| 3182.2 | Gotta pay interest on money you borrow... | SMURF::STRANGE | Steve Strange - USG | Fri Jun 17 1994 14:41 | 11 |
| >Does this mean what it sounds like it means? That holders of the new preferred
>stock are about to be paid a dividend by a company which is losing money?
Yes, and this is as it should be. Remember that a preferred stock
offering is equivalent to borrowing money. If you borrow, you've got
to pay interest, and that's what this dividend is. Of course, the
per-share value of the preferred stock has dropped since the offering,
so although investors are being paid interest on their investment, they
still can't pull out (sell the stock) without a significant net loss.
Steve
|
| 3182.3 | possibly a good move... | GRANMA::FDEADY | it takes courage to enjoy it... bj�rk | Fri Jun 17 1994 15:51 | 6 |
| The preferred stock holders also had filed a suit regarding
questionable stock valuation, and its quick offering. Perhaps
this was an olive branch, or an attempt to soothe investors'
emotions.
Fred Deady
|
| 3182.4 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Fri Jun 17 1994 16:09 | 3 |
| This is a regular dividend. That means it's scheduled, expected, etc.
The board's approval is a formality. If they didn't approve it, we'd
effectively be bankrupt.
|
| 3182.5 | | DIODE::CROWELL | Jon Crowell | Fri Jun 17 1994 22:40 | 6 |
|
What is the dividend based on.. Eg; inital stock price or the current
price?
Jon
|
| 3182.6 | so you asked, so you now know | POBOX::CORSON | YOU CALL THAT A SLAPSHOT....? | Sun Jun 19 1994 14:11 | 17 |
|
Preferred stock is carried on a company's Balance Sheet as a
financial category under Stockholders' Equity. On the Income Statement
payout is treated as a separate line item usually after the Net
Income(Loss) line.
Payout is based on a fixed percentage yield at issuance. Digital
preferred "went public" at 8.775 yield at $25.00 a unit.
As the price of preferred stock flucuates, its yield (which is
fixed) changes (called "adjusts"). Digital preferred is Baa rated (which
is just barely above junk). It is cumulative also, which means if
Digital stops paying the coupon rate it keeps accrueing. As an
investment, the preferred is now considered "attractive" for agressive
investors seeking a fixed income yield.
the Greyhawk
|
| 3182.7 | | SUBURB::FISHERT | | Mon Jun 20 1994 06:38 | 16 |
|
Preferred stock also has a higher debt subordination than common
stock. If a company goes bust, preferred shareholders are treated
as a form of creditor, though a a lower level of priority than the
creditors who directly lent us money - i.e. the banks or vendors who
extended us trade credit.
Issuance of preferred stock is usually a sign that a company is having
trouble raising cash. Logic goes that with the high(er) debt
subordination and a dividend, investors feel safer. Even so, I
understand that the preferred offering didn't generate the investor
response hoped for.
Regards,
Tom
|
| 3182.8 | | KERNEL::HOBBSA | Andy Hobbs, UK CSC. Basingstoke. | Mon Jun 20 1994 10:44 | 8 |
|
Folks,
what is the difference between Preferred Stock and the
shares I buy through the Employee Stock Purchase Plan ?
Andy..
|
| 3182.9 | Difference is Dividends | NESSIE::SOJDA | | Mon Jun 20 1994 10:59 | 16 |
|
>> what is the difference between Preferred Stock and the
>> shares I buy through the Employee Stock Purchase Plan ?
As noted in this string, they are considered to be two different classes of
stock and have different priorities of claim on the company assets should the
company go into bankruptcy or be liquidated.
However, the major immediate difference is if you hold Preferred stock you
will receive a dividend check each quarter. With the stock you get the ESP,
you get nothing.
Larry
|
| 3182.10 | | KERNEL::HOBBSA | Andy Hobbs, UK CSC. Basingstoke. | Mon Jun 20 1994 11:23 | 4 |
|
Thanks Larry.
Andy.
|
| 3182.11 | You have a voice in running the Co?! | ISLNDS::KETZ | | Mon Jun 20 1994 14:35 | 3 |
| In addition to reply .10, the ESP stock is common stock, you get the
right to vote for Directors, etc. Preferred stock has no voting
rights.
|
| 3182.12 | Re.6 - but open to correction as always. 8-) | SUBURB::POWELLM | Nostalgia isn't what it used to be! | Tue Jul 05 1994 06:09 | 7 |
|
Greyhawke is not quite completely correct, the yield does indeed
fluctuate, but the "interest" rate of 8.*** is based upon the nominal
par value of the Prefered Stock which is $1.00, not the $25.00 or
whatever at which they were sold.
Malcolm.
|
| 3182.13 | $$$$$$$ | PAKORA::KANDERSON | Hush!,Hush! | Mon Jun 12 1995 09:20 | 7 |
| Does anyone know what the shares are at this morning???
Cheers
Katrina
|
| 3182.14 | | QUARK::LIONEL | Free advice is worth every cent | Mon Jun 12 1995 10:27 | 7 |
| If you call DTN 223-6000 you can get a quote that is updated a couple of times
daily. There are Internet servers offering stock quotes as well.
This note is about the Digital Preferred shares - is that what you're interested
in?
Steve
|
| 3182.15 | | PAKORA::KANDERSON | Hush!,Hush! | Mon Jun 12 1995 10:33 | 1 |
| thanks....and no!
|