Boeing is preparing to offer a preferred stock and word on the street is the dividend will approach 6%. Remember how much BAC Preferred Warren Buffet bought when it was down, and that kind of worked out OK.

https://boeing.mediaroom.com/2024-10-28-Boeing-Announces-Launch-of-Concurrent-Offerings-of-Common-Stock-and-Depositary-Shares

OldArmyCT said:

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Boeing is preparing to offer a preferred stock and word on the street is the dividend will approach 6%. Remember how much BAC Preferred Warren Buffet bought when it was down, and that kind of worked out OK.

https://boeing.mediaroom.com/2024-10-28-Boeing-Announces-Launch-of-Concurrent-Offerings-of-Common-Stock-and-Depositary-Shares

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I like the looks of this - I'll have to investigate more.

I have some Boeing LEAPS right now, but this might be a better way to play it, especially if the conversion rights are compelling.

Anyone here a maven at analyzing new issues? I think I could use some additional viewpoints before deciding...

Here's a contrarian view (although I do think I like your idea. Just devils advocate)… BofA was in a strong position when Brk bought those preferreds but share price wasn't reflecting that. BofA wasn't making an offering of preferreds to the public. Warren famously called up Moynihan and said he'd like to invest and buy preferreds. Moynihan graciously denied and said they didn't need the investment… but Warren was persistent saying that the investment would provide "stability, a stamp of approval, and a cash cushion"

That's just a fun story to say it's not an apples to apples scenario. Boeing needs cash in a bad way. Are there warrants to be able to convert to common stock at a later date?

One of the big attractions to Warren was sure we are clipping a 6% dividend, but he could convert it to common with a basis of around $7 at a later date. This was so attractive because it was a bet on one of the leading banks that Warren was positive the share price would appreciate. It was a win win all around.

I'm not saying I disagree with the call, but not all preferreds or situations are created equal! Boeing needs the cash, BofA didn't at the time. I think you need to be dang sure that the share price is going to increase and there's warrants to convert or your dividend may not look so good.

aggiebrad16 said:

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That's just a fun story to say it's not an apples to apples scenario. Boeing needs cash in a bad way. Are there warrants to be able to convert to common stock at a later date?

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If there was warrants I'd do it in a heartbeat.

I was a BoA employee when their stock dipped below $5. I put almost half of my 401K into BAC. Worked really well, as did every bonus I received from them as they all were paid in BAC.

I'm really just not sure what this means, can someone dumb it down for me? Looks like after 3 years it's mandatory to convert to common but not sure at what price.

Lot's to unpack here. No dividend rate yet, no conversion rate yet, no terms on the preferred (deferrable? cumulative or non-cummulative?, etc.). All to be determined at time of underwriting and placement. Nothing unusual there. But looks like they'll be a registered security you can trade on the NYSE once they are public.

There are no warrants, as some have mentioned. And for the record, warrants don't "convert" anyway.