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Alright degenerates, I’m trying to understand whether this is a galaxy-brain capital markets move or just corporate pickpocketing in a necktie.
Using **RILYP** as the example. Regarded ticker? absolutely, because its what we do here.
Here’s what I think I’ve got so far:
* **RILYP = preferred stock**, not a bond
* **RILYZ = senior note / baby bond**
* RILYP has a **$25 liquidation preference**
* The **6.875%** is the dividend rate based on the **$25 par**, not float, not ownership, not some secret wizard percentage
* So annual dividends are about **$1.71875/share**
* If the stock is trading around **$11.84**, the “yield” looks absolutely filthy, like **14.5%**
* BUT if dividends are suspended, that yield is basically an Excel hallucination with a pulse
* Yes, it’s **cumulative**
* Yes, it’s paid **in arrears**
* Yes, unpaid dividends stack up like dirty dishes in a frat house
* No, “accrued” does not mean cash magically appears in my brokerage account while management is hiding in the bushes
So here’s the part that is melting my brain:
As I understand it, the company has **two ways** to get rid of this thing:
**1) Open-market repurchases**
They buy shares from willing sellers at whatever weak-handed raccoons are willing to dump them for.
So if it’s trading at **$11–12**, they can buy there.
But they **can’t force me** to sell for that, correct?
**2) Formal redemption / call**
They exercise the contractual right to redeem it at what I believe is **$25/share plus accumulated and unpaid dividends**.
So now for the real tinfoil:
What stops them from doing the following absolutely cursed maneuver?
* quietly buying as much RILYP as possible in the open market at **crackhead prices**
* saying absolutely nothing useful
* pretending any future redemption is just “under consideration”
* letting retail paperhands donate shares at $11–12 because they have the emotional resilience of wet cardboard
* then, after loading the boat, announcing a redemption and blasting the remaining stubborn goblins out at **$25 + arrears**
Basically:
**Can management play dumb and say**
“Whoa whoa whoa, that wasn’t a plan, that was just a thought, bro”
even if internally they were:
* discussing redemption
* modeling the cost
* lining up financing
* whispering to lawyers
* and dry-humping a spreadsheet labeled “preferred cleanup strategy\_FINAL\_v7\_REALFINAL.xlsx”
Because that seems like the kind of thing that would make securities law professors start sweating through their Dockers.
My main question is where the line actually is between:
* “just kicking tires” and
* **material nonpublic information**
Because if management knows there’s a realistic path to redeeming this thing at **$25 + arrears**, and meanwhile they’re scooping shares from retail at $12 like a coupon-cutting serial killer, that seems... not exactly wholesome.
Also, separate question:
If they’re only buying in the open market and I tell them to kiss my ass and keep my shares, I assume they **cannot force me out** unless they actually pull the trigger on a formal redemption. Right?
So I’m trying to figure out whether suspended cumulative preferreds trading at half of par are:
* a genuine distressed opportunity
* a value trap wearing lingerie
* or a legal gray-zone carnival game where management gets first peek behind the curtain and retail gets a plastic spoon
Not asking whether **RILYP** is a buy.
I’m asking whether this setup basically allows the issuer to:
1. let the market price in doom,
2. quietly harvest weak hands,
3. then come back later with the “surprise, it’s $25 now” finishing move on whoever didn’t fold.
Would appreciate input from anyone who knows about:
* preferred stock redemptions
* cumulative dividend arrears
* issuer repurchases
* 10b-5 / MNPI issues
* or just old-school Wall Street rat behavior in its natural habitat
Because right now this whole thing feels less like investing and more like being locked in a room with a magician, a divorce lawyer, and a feral CFO.