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    poofy85's Avatar
    poofy85 Posts: 3, Reputation: 1
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    #1

    Jul 22, 2010, 09:53 PM
    Covertible Shares
    I am confused by the wording of this: "The company has 400,000 preferred shares. They are convertible into common shares 6 for 1 at the option of the investor".

    I am confused by the 6 for 1... Does this mean for every 1 preferred share they get 6 common shares? Or for every 6 preferred shares they get 1 common?
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
    		  
    #2

    Jul 23, 2010, 04:31 AM
    The former. To keep it straight, think of it in terms of the shareholder: "6 for 1" means "I get 6 for every 1 I trade in."
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