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jack's avatar

Preferred holders: absorb gains before common. dilute common if converted. reduce upside for common. increase downside for common This is why MRLN’s common equity is negative even though the company is:cash‑rich debt‑light post‑recap operationally improving Preferred equity + minority interest = senior claims that sit above common holders. If converted favorably x5+ that's the upside

Shawarma Capital's avatar

Also, just fixed the article, the reset was mis-stated.

Shawarma Capital's avatar

Yes, but no. Merlin is gated on cert. That $5 reset is locked in

jack's avatar

If management restructures or converts that interest in a way that benefits common shareholders, MRLN becomes a 5–10× candidate.If they don’t, common equity stays underwater forever.This is the single most important variable in the trade

Shawarma Capital's avatar

Can you please elaborate? confused on how this is the binary gate.