Atp Oil & Gas Corp Perp Pfd Conv 8% (NASDAQOTH:ATPGQ)

CAPS Rating: 4 out of 5

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11
Player Avatar TMFDeej (99.43) Submitted: 6/23/2011 12:29:36 PM : Outperform Start Price: $70.38 ATPGQ Score: -98.34

Here's an interesting new stock, ATP Oil & Gas Series B Convertible Preferred stock. I know that this is a favorite company of many here at The Motley Fool so I thought that it was worth mentioning. This new issue trades OTC under the symbol ATPGP.PK. At its $100 face value, it pays an 8% dividend and it is convertible to ATP common stock (ATPG) at a ratio of 4.5045 shares per B share.The B shares are already down to $90.50, making the effective dividend payment equal to around 8.8% and the ATPG break even conversion price $20.09. This compares to ATPG's current share price of $14.82.Here's a link to the prospectus for the shares for anyone who's interested:http://phx.corporate-ir.net/phoenix.zhtml?c=123846&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTEtMTY3OTA4L3htbA%3d%3d#supprom197039_9Deej

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Member Avatar awallejr (85.51) Submitted: 10/24/2011 2:56:02 PM
Recs: 1

It's an interesting play if you believe in the long term viability of this company, which I am. However, there are certain restrictions which makes this play a bit unsure. First, aside from the first payments, subsequent dividend payments will be made in stock until the company can meet certain finance conditions. So don't expect actual cash payments. Also they can force conversion by 2014 should the stock basically trade continuosly over 150 pct, which by then I think the common wiIll. As I see it this is basically a way of accumulating common shares at a discount. Nice find.

Member Avatar jwoo100 (< 20) Submitted: 1/22/2012 10:43:09 PM
Recs: 0

The comment "So don't expect actual cash payments" is mistaken. I own this stock and I do receive cash payments. I believe the stock must be automatically sold to pay you. The good thing for the company is that since they pay in stock, the payments don't come out of their actual cash.

Member Avatar awallejr (85.51) Submitted: 1/30/2012 9:35:56 PM
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No jwoo, the company was only forced to pay cash for the first dividend, all subsequent payments can be in cash or stock. At it's current price under $40 it is well worth speculating on.

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