Yober asks:


In a forced conversion scenario, which is at $2.00, which is an exchange of exactly 12.5 commons for each preferred a, how do you suppose yellow will fund the shortfall to guarantee the $25 redemption price as per prospectus?

 

The prospectus does not guarantee that you will get $25 for your Pref A shares. It says that Yellow Media can exchange each Pref A share for 12.5 common shares (plus a fraction of a share to cover missed dividends). It also says that if any Pref A shares still exist at the end of December, holders have the right to sell them back to the company for $25. If the shares have already been converted to common, the $25 guarantee will not apply.

 

sure, we may not get a $25/share cash payout, but we sure as heck expect them to fund the gap between the current 6 cent common and the $2.00

 

You can expect anything you want, but you will be disappointed. 

 

If Yellow Media, which has the legal right to convert Pref A into about 13 shares, instead decides to pay out $250 million that it has no need to pay out, the directors of the company should expect to be sued. This would be a gross dereliction of their duty.