Corning, 2002

Corning, with large investments in fiber optic technology, was hit particularly hard by the collapse of the telecommunications industry in 2001. With over $4 billion in debt, the firm's survival appears to rest on raising additional equity capital. James Flaws, the chief financial officer, is considering raising $500 million with an issue of mandatory convertible preferred stock. The protagonist is considering whether to invest in Corning or in a new mandatory convertible preferred stock that is being offered to the public.