RE: RE: RE: RE: RE: YLO.PR.BMr. Plant
For me, maturity risk is my main concern, so holding the C's and D's for many years is out of the question since this is the highest total risk way to play the company. I do believe that the A shares will be taken up by the company in March 2012, in line with their cash flow improvement plan. Since the company is on a 2 year debt reduction plan I am comfortable with holding the A shares as a back door entry to the common shares since I am additionally protected with the conversion discount, dividend and credit priority. And maturity is only 6 months out, during which time the company will be improving its financial situation, but I am not sure how their financials will look a few years from now as they will be very deep in to the online business by then. So I do think the risk of the long dated B,C and D preferreds is too high for my risk tolerance, but that doesn't mean it will be a bad investment. I just think that you actually have a large margin of safety with the A shares, and a very big maturity risk with the long dated prefs. Of course there is risk with everything and like you said the discount will narrow or dissapear, but that will be good for the A holders because it means the price will have to rise, since the A shares are trading below fair value. I dont think it will last once a fund manager takes out the discount, since they already did some purchasing in the afternoon on Friday if you look at the volume. To me this is what an opportunity looks like but everyone march to their own drum. Cheers and good luck to everyone.