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<p>[QUOTE=&quot;medoraman, post: 1340162, member: 26302&quot;]Sir, the only time I said something like that, (and maybe I shouldn&#039;t have been so strong), is when you tried to say common stock was not ownership of a company. This is Corporate Finance 101, first day in class, basis of understanding business. Common stock IS ownership of the firm. Preferred stock, bonds, notes, and every other financial instrument is a promise to pay, a debt, the only equity of a firm is common stock. Go back to the example I gave Inflexion. In that example there was no debt and 1 million shares of stock. If that firm is sold to another firm, who gets the money? The common stock holders. Yes, if there is debt the debt gets paid first, but ONLY the face value, nothing more. It is the common stock holders who can receive the outsized profits well above their investment. </p><p><br /></p><p>It does not matter what the par value of the stock is, what the equity in the Balance sheet is, the common stock holders get every red cent. If the firm is sold for $100 million, then each share is paid $100. Period. Common stock is ownership. This is the assertion of yours I was reacting strongly to, as I do not wish anyone reading this thread to be confused about that. If someone has this wrong, then every single thought they have about stocks is wrong.[/QUOTE]</p><p><br /></p>

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