Dual share stocks?

[Wilks]

I am looking into buying some shares of Benihana(BNHN,BNHNA). I am curious about the dual shares for this company. Class A shares have 1/10th the voting power of the common shares yet trade(right now) at a premium to the common shares. Why would anybody want to invest in these Class A shares. Or am I missing something and looking at this situation wrong. As long as the company does well both shares should increase in value but wouldn't you rather own the common shares than the Class A ones?

Thanks for any feedback.

Brian

[gijoe9]

The class A shares are debt the common shares are ownership. The "Prefferred shares" represent shares that were issued as debt and will have stipulations like the 1/10 voting privilige and being able to convert to common shares etc.. The huge advantage to the class A shares is that they are less risky than the common shares and in the case of a chapter 11 the owners of prefferred shares get any money remaining in the company before the common share holders. Prefferred shares tend to get dividends/interest payments even when the common shares do not. Prefferred shares may have a time limit on there existance or when certain criteria are met they will be converted to common shares or be payed off.

Preferred Stock
Here is a link to a more indepth explantaion than I can go into right now. There are also some links on that page to articles on this subject and how it relates to common stock bonds among other things.

[aquaswim47]

I really think they have different voting and dividend rights; one might be common stock and the other preferred.

[Wilks]

Thanks for the responses......."Preferred" and "Class A" stock are two different things, are they not? I guess my main concern is if it matters which one I would invest my money in. Is one type(the common or class A) better than the other or does one have the ability to outperform the other one based on their designations of "common stock" and "class A" stock?

Thanks again


Brian