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Old 02-12-2020, 03:24 PM   #4781
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I'm still holding it's sister MDLX. I bought it as a part of my income portfolio, even though, I don't use it for income directly. Yeah, I'm down $2.00/ share over 200 shares, so what the hey? Or is it hay?
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Old 02-12-2020, 03:59 PM   #4782
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I've made worse mistakes, but it's no fun.
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Old 02-13-2020, 01:00 PM   #4783
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Originally Posted by Slow But Steady View Post
Dear Friends,

One of my mistakes was MDLQ. I'm cleaning up my porfolio a bit. Do I keep that one, now yielding 9.7% or so? Or bite the bullet and take the loss?
My recent snafu is way worse. I've held GLOP for a little while at an average price of around $15. Last week they announced an upcoming dividend cut and it's trading around $5 right now.
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Old 02-13-2020, 01:57 PM   #4784
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My recent snafu is way worse. I've held GLOP for a little while at an average price of around $15. Last week they announced an upcoming dividend cut and it's trading around $5 right now.
What's the "unusual expense" that tanked their Q4 earnings? Something looks really strange as even their investor presentation didn't mention what that was. Even stranger was they continued to pay out large dividend for Q4 and then cut it considerably.
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Old 02-13-2020, 02:19 PM   #4785
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What's the "unusual expense" that tanked their Q4 earnings? Something looks really strange as even their investor presentation didn't mention what that was. Even stranger was they continued to pay out large dividend for Q4 and then cut it considerably.
From the conference call, "Lastly, as of December 31, we recognized a noncash impairment charge of approximately $139 million related to our five steamships built in 2006 and 2007, primarily as a result of lower expected utilization and earnings estimates for these vessels."
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Old 02-13-2020, 02:39 PM   #4786
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From the conference call, "Lastly, as of December 31, we recognized a noncash impairment charge of approximately $139 million related to our five steamships built in 2006 and 2007, primarily as a result of lower expected utilization and earnings estimates for these vessels."
Thanks. Seems interesting to me to just have a BTW comment for $139 million hit to earnings and not called out anywhere in the presentation. And like that wasn't known earlier as they were giving guidance? Sounds like a company I'd steer clear of.
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Old 02-13-2020, 04:13 PM   #4787
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My recent snafu is way worse. I've held GLOP for a little while at an average price of around $15. Last week they announced an upcoming dividend cut and it's trading around $5 right now.
I had GLOPC for a while, but sold it at breakeven after collecting divs for 18 months or so.
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Old 02-16-2020, 09:14 AM   #4788
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84% of my Wells Fargo 6% preferred Series T (WFCPRT or WFC-T) is being called.

Odd thing is it looks like I'll get $25 plus another quarterly divvie of 38c for Dec 16 to Mar 16... but it was trading on Friday at $25.56-$25.69.... how is that?

Why would anyone bid more than $25.38 knowing that it will be called in a month?

Am I missing something or are investors really that stupid?
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Old 02-16-2020, 09:53 AM   #4789
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84% of my Wells Fargo 6% preferred Series T (WFCPRT or WFC-T) is being called.

Odd thing is it looks like I'll get $25 plus another quarterly divvie of 38c for Dec 16 to Mar 16... but it was trading on Friday at $25.56-$25.69.... how is that?

Why would anyone bid more than $25.38 knowing that it will be called in a month?

Am I missing something or are investors really that stupid?
I have series L, also convertible and I have no call notice. They are trading now for close to the conversion price equivalent which I assume kind of acts as a hard upper limit for their value. Current yield at current price is 4.86%. At the price I paid I get more like 7% on cost.

Don't understand all the nuances of pref investing....maybe you can educate me this afternoon.
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Old 02-18-2020, 10:01 AM   #4790
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Originally Posted by pb4uski View Post
84% of my Wells Fargo 6% preferred Series T (WFCPRT or WFC-T) is being called.

Odd thing is it looks like I'll get $25 plus another quarterly divvie of 38c for Dec 16 to Mar 16... but it was trading on Friday at $25.56-$25.69.... how is that?

Why would anyone bid more than $25.38 knowing that it will be called in a month?

Am I missing something or are investors really that stupid?
Looking to get the wisdom of the group on a problem that I am having with Fidelity regarding this partial call.

This is my first partial call. I have had full calls in the past and in some cases the market price was close enough to what I would receive if I waited for the call that I sold the issue and reinvested the proceeds rather than waiting for the call.

Sometime after the announcement on February 14, Fidelity bifurcated my 500 share position into an 80 share lot and a 420 share lot. I sold the 80 share lot this morning for $25.68 (more than the $25.36 that I would receive on Mar 16) and when I went to sell the 420 share lot it would not let me do so, so I called Fidelity.

Fidelity says that this is how all partial calls work, that Wells effectively called 420 of my 500 shares and they are frozen until the call date. I respond that the effective date of the call is March 16, so any holders of this ticker on March 16 knows that 84% of their shares will be called, but that I don't see how Wells and Fidelity can lock up my shares before the call date based solely on the announcement of the call. Does this make sense to any of you? For any holders of WFCPRT or WFC-T with brokers other than Fidelity, are you also prevented from selling 84% of your shares held as of February 14?

Quote:
February 12, 2020 -- Wells Fargo & Company today announced that on March 16, 2020, it will redeem 26,720 shares of its Non-Cumulative Perpetual Class A Preferred Stock, Series T.
I asked the Fidelity supervisor why I can sell in the event of a full call but not in the event of a partial call... in each case the market know that if they hold these shares on March 16 that a cartain percentage of them will be called for $25 plus the 37.5c divvie... so in each case marketplace participants have all the information that they need to make an informed decision on the value of the shares. The only thing he could say is that they just work differently. He said that if I sold the shares when March 16 comes along that my account would be short 420 shares.*

However, if this practice of locking up shares to be called is standard practice as Fidelity indicates, then I think I can now answer my question from the earlier.... what I was missing was that the shares now trading are only the shares that will survive the call so their valuation is based on more than just the call proceeds.

Thoughts?

P.S. Luckily, the amounts involved are not significant, in fact, arguably negligible, but I am still interested in the answer.

------------------------------------------------------
*at the time I didn't think to ask what would happen if my account was 420 shares short.... depending on the consequences I might have been ok with it.
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Old 02-18-2020, 01:24 PM   #4791
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Thoughts?

------------------------------------------------------
*at the time I didn't think to ask what would happen if my account was 420 shares short.... depending on the consequences I might have been ok with it.
PB, the recent partial call of SPLP-A worked the same in my Schwab account. I think it's standard practice.
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Old 02-18-2020, 02:58 PM   #4792
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PB, the recent partial call of SPLP-A worked the same in my Schwab account. I think it's standard practice.
Yeah.... after I posted above I did a search for posts including "partial call" in this thread and after reading a bunch of them that seemed to be a common theme that shares to be called are as Mulligan put it 'impounded". I'm not sure if it makes sense because they impound the shares before the call date.... in my case a whole month... rather than lock up my money for a month, just change the call date to today and pay me the par and prorated dividend and let me go.
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Old 02-18-2020, 04:53 PM   #4793
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Yeah.... after I posted above I did a search for posts including "partial call" in this thread and after reading a bunch of them that seemed to be a common theme that shares to be called are as Mulligan put it 'impounded". I'm not sure if it makes sense because they impound the shares before the call date.... in my case a whole month... rather than lock up my money for a month, just change the call date to today and pay me the par and prorated dividend and let me go.


Agree, mine were locked up for nearly a month, as well.
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Old 02-19-2020, 10:31 AM   #4794
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I have series L, also convertible and I have no call notice. They are trading now for close to the conversion price equivalent which I assume kind of acts as a hard upper limit for their value. Current yield at current price is 4.86%. At the price I paid I get more like 7% on cost.

Don't understand all the nuances of pref investing....maybe you can educate me this afternoon.
Beach, I think the conversion price that you are looking at related to Wachovia Bank, which is no longer a thing (was bought out by Wells Fargo). The conversion price for WFC is in the $200ís I believe.

Correction, itís a $150ís price. The following is from QuantumOnline, a wonderful resource on preferreds and other income securities:

ď After the merger of Wachovia into Wells Fargo, the preferred is now convertible into 6.3814 shares of Wells Fargo & Co. (NYSE: WFC) common stock, an initial conversion price of $156.71 (calculated) per common share. Ē

So WFC-L is basically a busted preferred, and trades on its interest coupon alone. I suppose WFC COULD reach $150ís someday.....nah, Iím sure theyíll have another scandal or three in the future (disclosure: I own the stock)
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Old 02-19-2020, 02:27 PM   #4795
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Beach, I think the conversion price that you are looking at related to Wachovia Bank, which is no longer a thing (was bought out by Wells Fargo). The conversion price for WFC is in the $200ís I believe.



Correction, itís a $150ís price. The following is from QuantumOnline, a wonderful resource on preferreds and other income securities:



ď After the merger of Wachovia into Wells Fargo, the preferred is now convertible into 6.3814 shares of Wells Fargo & Co. (NYSE: WFC) common stock, an initial conversion price of $156.71 (calculated) per common share. Ē



So WFC-L is basically a busted preferred, and trades on its interest coupon alone. I suppose WFC COULD reach $150ís someday.....nah, Iím sure theyíll have another scandal or three in the future (disclosure: I own the stock)

Thanks!

Maybe people like me shouldnít buy preferreds ? . I just have a few to try to learn what I am doing.
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Old 02-19-2020, 04:05 PM   #4796
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WFC-L is one of my largest holdings; and being a busted convertible, it cannot be converted until WFC common shares are around $150, as Graust says.


The current price of WFC common is $47, so the stock would have to triple from here for there to be any risk of conversion. Further, the $156 price has to be maintained for 20 out of 30 consecutive trading days.


For all practical intents and purposes, I regard this issue as a perpetual which will not be converted in my lifetime.



So, any motivation for buying WFC-L at today's price should be based solely on today's yield and if one is satisfied with it. Rising rates will depress the price, obviously.


My personal opinion is that WFC-L upside is limited, but if low rates continue for a while ( like Japan ), this could be a steady and reliable investment.
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