Common Stock: Rapid Fire

What this video covers

• The exact liquidation hierarchy: secured creditors, unsecured creditors including debentures, subordinated debt, preferred stock, then common stock, and why residual claim means unlimited upside but last-in-line risk
• How authorized, issued, outstanding, and treasury shares nest mathematically, and why treasury stock is issued but not outstanding with zero votes, dividends, or earnings per share (EPS) inclusion
• Statutory versus cumulative voting, which majority holders prefer, and how pre-emptive rights work only if the charter grants them
• Transfer agent versus registrar roles and why they must remain separate entities
• Spinoff cost basis split by relative fair market value (FMV) versus merger basis substitution, and why loss is never recognized in reorganization
• The strict two-part penny stock definition: unlisted and strictly below $5, including exchange-listed exemptions and issuer net tangible asset exemptions at $2 million or $5 million thresholds
• Established customer exemptions for the suitability statement only, the two-business-day signed disclosure requirement, and full exemptions for unsolicited orders, institutional accredited investors, and issuer insiders
• FINRA's over-the-counter (OTC) equity recommendation review beyond penny stocks and its three exemptions