Headlines of Interest

5 thoughts on “Headlines of Interest”

1. Hi, can you post pricing table for NEE-S, please? Thank you!

   Reply

   1. Hi Henry K – these are ‘equity units’ and we don’t cover them so I have nothing to post.

      Reply

   2. Hi HenryK,
      Just a thought about these kinds of issues. Not financial advice, just my personal perspective (and probably not worth the paper it is written on):

      Quantum online has a summary of the issue and a link to the prospectus, which links to other documents. VERY complex.

      Personally, i won’t play with these complex offerings unless I know precisely why they were issued.

      I created some of these complex monsters (in a former life). In my experience, they are created for very specific reasons, usually to reallocate risk or fix complex tax or accounting problems, or to satisfy a regulator as part of a complex transaction. all of the parts work together to solve those problems, and making money for retail investors is never a priority.

      As a retail investor, if you don’t know what those reasons are, how all the “moving parts” work together, and who benefits and why, you may end up in a bad place (like the old adage – if you are sitting in a poker game and can’t point out the sucker, its probably you).

      That said – somebody is usually making money in these transactions, but you have to be careful to understand the transaction or it won’t be you.

      Again, just a thought. You should do whatever fits your strategy and comfort level.

      Reply

      1. I was just reviewing those NEE equity units last night. After looking at the price of the common, understanding the terms, trying to project where the common will be when conversion is mandatory, etc.. I came away from the experience feeling like they were not a very good deal at the current prices. I cannot explain why but I felt like I would get paid the interest just fine but end up with shares that I would have probably been better off just buying outright. The units kind of cap my upside value and give me all the downside risk. No matter how high the stock price might go over 90.38 I only get 0.5532 shares. In that situation I should have just bought the stock outright today at 7xish if I thought that would happen.

         They are pretty clever people designing these and the mandatory conversion date is close enough where their goal is just to give you 50ish in value of shares at the end. I highly doubt there will be some welcome surprise.

         I say this even though I own a pretty good slug of NEE in a retirement account I bought to just forget about for a decade or two.

         Reply

      2. Some smaller companies and sleazy companies do that. The bigger REITs and financials are more reliable. Utilities such as NEE may be among the least suspect only concern for me is the below average divvy.

         Reply