It's as if your drug dealer has now become richer than you and now helps you refinance your house. Now he has you by the balls and the nose.
it's a sweet deal for the Abu boys, there's no denying that... you could sell a fair few leaps against that position
What is the coversion rate? If Citi stock falls to $15, and Abu Dhabi converts, will they own 10% or 4.9% of the company? If Citi stock goes to $60, and Abu Dhabi converts, will they own 2.45 or 4.9% of the company?
4.9% is based on number of shares outstanding and number of shares the preferreds convert to, which apparently is 4.9%. Price is not relevant with respect to % of shares. If I have 100 shares outstanding and I give you the right to convert to 10 shares a few years from now, assuming no other issues, you still convert to 10% equity regardless of the price of the stock.
I think if C stock drops, Abu Dhabi gets to renegotiate the conversion price..... Rubin... what a chump