Skip to main content

Posts

Showing posts with the label preferred stock

What is a Blank-Check company?

Blank-check company is development stage company without specific business plan or purpose or that has business plan to engage in a merger or acquisition with an unnamed company. These type of companies are bound by Securities and Exchange Commission Rule 419 to protect investors therefore they may be subjected to additional requirements if they are registering securities for public offering. Because SEC views them as penny stock  or microcap stock there is more rules and restrictions imposed upon them. For instance blank-check companies are not allowed to use Rule 504 of regulation D that exempts companies from registration of securities for offerings up to $1 million. Companies are also required to fully disclose all terms and condition of the offering. Popular type of blank-check company is special purpose acquisition company (SPAC), created to pull funds in order to finance merger or acquisition within certain time frame. It is publicly listed company that rises money...

What does fifth letter in ticker means?

A ticker or stock symbol is an abbreviation or an acronym that uniquely identifies securities of particular company on particular stock market. It consists of letters, numbers or both in a combination that is unique for every company. The term ticker itself came from the sound made by ticker tape machine that transmitted stock price information over telegraphic lines. They were supposed to be short to minimize the number of character printed on the ticker tape and to make them easy to recognize for traders and investors. Company's ticker may change due to various reasons, reflecting a merger, name change of a company or if the company trades on multiple exchanges worldwide. US modern letter only ticker symbol was developed by Standard&Poor to bring national standard to investing, Companies trading on New York Stock Exchange (NYSE) usually have three letter ticker symbol while Nasdaq ones usually have four letter stock symbol. In July 2007 Securities and ...

What you need to know about preferred stock?

Preferred stock, also know as preferred or preference shares is one of the main types of stock besides common shares. It is considered that preferred stock is a hybrid security that combines properties of debt (fixed dividends) and equity (potential to raise in price). They are distinct from common shares because they don't have voting rights but have higher claim on company's assets and earnings. Terms of preferred stock are described in issuing document; they can be issued under any set of terms that is compliant to laws and regulations. Preference in dividends is what distinguish preferred  from common stock. Board of directors makes decision whether or not company will pay dividends to its shareholders. Dividends are specified as percentage of the par value or as a fixed amount. Common shareholders can receive dividends only if preferred shareholders are already paid in full if board decides to pay them dividends in the first place. This makes them similar to bonds...

What is common stock?

A stock is a type of security that signifies peace of ownership in a corporation an represents a claim on a part of the corporation's assets and earnings. There two main types of shares: common shares and preferred shares. There are clear distinction between two types of shares, primarily based on voting rights and dividend payments. Common shares are also know as ordinary shares, voting shares or equity shares. First ever common stock was established in 1602 by Dutch East India Company and introduced on the Amsterdam Stock Exchange.  During initial public offering company offers shares for sale and in that way sells part of the company in order to raise capital. Underwriter helps company to determine type and pricing of offered securities. After IPO company's shares become publicly traded and company can issue new stock. Percentage of shareholders' ownership is determined by the number of shares in his possession, which are some percentage of total number of out...