In May 2008, the broker, who worked for one of biggest and most well-known brokerage firms, recommended that my client buy a newissueof preferred stock issued by Fannie Mae.
In an unusual conference call with Apple investors on Thursday, Mr. Einhorn called on the technology company to issue a new type of preferred stock as a way of returning cash to yield-hungry investors.
If nothing else, you should be skeptical of a tracking stock for the same reason you should be skeptical of any newissue: The issuer is going to be the most motivated to issue it when it can be sold for more than it's worth.
The U.S. Securities and Exchange Commission has been studying the issueof naked short-selling and even instituted new regulations in January 2005 that require the stock exchanges to report stocks that routinely fail-to-deliver.