What is Convertible Preferred Stock?

A convertible preferred stock is one that gives the owner the option to convert shares to common stock, usually by a predetermined date.

The shareholder usually has control over when to convert the shares, but in some cases there are provisions that allow the company to force conversion.

An investor may choose to do this conversion if they believe the company has high upside potential, and they want common stock exposure which would allow them to participate more in market gains.

What is Dividend Enhanced Convertible Stock (DECS)?
What is a Convertible Bond?
What Happens When a Company Goes Bankrupt?