I'll also add that liquidation preference is to reduce risk for investors in case things don't pan out well in a liquidation event. If all goes well and money s

I'll also add that liquidation preference is to reduce risk for investors in case things don't pan out well in a liquidation event. If all goes well and money starts raining from the sky, the payout will be equal for the common stock and preferred stock alike. I can't quite work out how that risk should be accounted for in financial value. Certainly the preferred shares are worth more, in that one should be prepared to pay more in order to buy them, but I'm not convinced that those disparate buy prices should be incorporated into the value of the company as a whole, since a preferred share and a common share represent the same percent ownership of a company. Perhaps somebody with more understanding than I could comment.