wait till the dilutive recapitalization is done - so you will be able to buy the stock close to the levels the private equity firms will negotiate.
a guess at the price point for the much needed capital infusion:
company needs at least around $50 mln to get rid of the bank credit line, some short term debt and payables and to finance future working capital expansion. As the company is still burning cash heavily they should try to get even more cash. Otherwise the company would have to tap the equity markets again within a short time frame.
Current market cap is $42 mln - new equity for distressed companies will come at a huge discount or perhaps even with warrants attached or as interest bearing preferred stock.
Look at QTWW today to get an impression what an equity financing can do to the stock price.
If they manage to issue common shares at a 20% discount to the current stock price the company will have to issue around 38 mln new common shares at $ 1.32 to achieve a $50 mln cash intake (prior to any placement fees).
This means the company has to issue 1.5x the current sharecount, so shareholder would be diluted by around 60%.
So just wait for the recapitalization and then buy the beaten down stock.
How much lower can it go really? At current prices my guess its a good buy. I don't really understand how it works, but wouldn't the current debt holders want a higher price and favor decisions that the markets act favorable on? Existing debt holders won't want a deal that dilutes either? Where would this dilution pressure come from? Necessity for cash for operations?