If it is conversion of preferred shares to common with the intent to enrich the owner of those shares, then I see the scenario of the company buying back shares to stabilize pps as workable...but maybe a bit unethical? If it's issuance of NEW common shares up to the A/S (which can be raised at any time to allow further dilution), then I have a problem with it, as it would just make sense to use the money in the set-aside to fund expenses, acquisitions, etc... rather than issue new shares, then try to stabilize that pps artificially.