Reply #73: The newspaper article a few paragraphs in [View All]

[Yupster]

explains that the bondholders are getting 10 % and warrants to buy 15 % more at later dates. You oversimplified it saying they are getting 25 %. At least you could have been consistent and said the union was getting 20 % then.

That would be very inaccurate though because since there are no exercise prices on the warrants no one has a clue whether they will ever be worth a tinker's dam or whether they will expire worthless. At some point prices will be put on them and we'll see if they are potentially valuable or a joke.

When you talk about risk I'm getting the idea that you are not differentiating between stockholders and bondholders. The two things are apples and oranges.

When you buy a stock you are buying ownership in the company. You vote for who site on the board, can bring up proposals for shareholders to vote on and have a say in how the company is run. You also know that if the company goes bust you will get nothing as you are last in line. If the company does great you share in the profits though through rising dividends and share prices going up.

A bondholder is very different. He has no ownership or say in the company. He just loans the company money and gets a set interest rate and a set date when he gets his money back. If the company goes bust he is first in line to get whatever value is left in the company after it is liquidated.

Those are the rules and the risks that stockholders and bondholders take when they invest.

The company has gone bust and yet the bondholders are not getting the remaining value in the company.

They are being taken advantage of, and their screwing is being orchestrated by the government and that should worry all of us.