Common stocks vs Preferred

Neonblue said: "This couldn't have happened at the worst time. I'm just working on my "stock education" now. I've got plenty of money to start working with so that's no big deal. But I don't know if this is for me or not. Here's the deal... I just got a letter from Vonage for buying their stock at the IPO price since I am a vonage customer and meet their requirements for IPO investment. In reading the prospectus I see that I would be buying common stock. Not knowing what that term meant, I did a quick google search and found out that its "voting stock" and could potentially pay dividends. I'm not too interested in dividends, I'm more interested in buying and selling. The stocks are selling on blocks of 100 so I'd need to purchase at least 100 stocks to get in. The worst thing, I've got until this friday (19th) to buy it which doesn't give me as much time as I'd like to explore what it all means. Anyway. How does common stock react in the market? If the stock surges $5 or $10 on the first day, can I sell it using my Scottrade account? This would not short my funds, but if its not what I want to do then I'd rather hold that cash to start buying and selling other stocks. (In other words, I'd rather have that cash available for other trades if that were the case.) Insight anyone? Thanks."

lost said: "when you look in the paper or on yahoo finance the share prices you are looking at are "common shares". these are the shares that anyone can buy or sell when you want (if you have the right price). now you would have to move the shares into your scottrade account before you could sell it using your account. (unless i read your post wrong, i thought you where buying it throught the company and not your scottrade account.) hope this helps"

rotorite86 said: "Simply stated, Preferred stock has no voting rights, but is guaranteed a dividend. If a firm issues a dividend, the preferred stock holders MUST be paid before the common shareholders. In the event of liquidation, preferred stock holders get paid before common shareholders. With common stock you get a vote, usually one vote per share you own. Dividends are not guaranteed, and even if a dividend is declared, the preferred holders will get paid first. If the company is liquidated, and they get to the common shareholders and there is no money left, well, tough luck for them. Usually, common shares will outperform preferred shares in the long term. Common shares are more risky than preferred shares though."

Neonblue said: "So in other words, this type of stock is a long term stock. Is it possible to sell in the open market using normal brokers like Scottrade?"