Ok, you're sitting on all kinds of UPS stock, but have no ready cash to speak of. Paper rich, cash poor.
Prior to IPO, certain banks would make a loan (hypothication loan) using your UPS stock as collateral. They hold the stock, but you still collected dividends on it.....you just couldn't sell it while it was hypo'ed.
You got your $$$ that you needed for whatever reason......like buying additional UPS stock or downpayment on house or cash for a new car, whatever. Then you have to pay back the loan with some interest.
You didn't want to sell your stock....first, because it was discouraged and second, because of the capital gains taxes you would owe.
So, you could get cash, and still collect your dividends and just make payments on your loan and get your stock back when the loan is paid off.
It's just that the paper (stock), although worth a lot was worthless in it's paper form.
Through hypo'ed stock, years ago we were able to secure 13 rental properties as an investment. Got the benefit of that real estate doubling in price, selling it off and repaying the loan and having a hefty profit from the sale of that property.
Get it ??