Re:Stripe announces new round of funding and plan to provide...
by svnt on Saturday March 18, 2023 @04:10AM
(#35207193)
They do both typically convert to the same class at IPO, but preferred often has a conversion ratio — that is, it isn’t always 1:1, the way common is.
Functionally dilution should be considered in the full context of the financial outcome unless we are talking about voting rights and I wasn’t. For small shareholders the only real value of stock is money. If it is worth less money then its value has been diluted.
Common vs preferred stock only matters in the event of same or liquidation if a company - preferred is paid out first. At IPO, both kinds of shares convert into the same public class of stock (with the rare exception of founders creating a special class of shares for increased voting power).