How can it not be a potent weapon? Smulyan & Co. can issue the authorized prefs and effectively force conversion to common. Cleans up the balance sheet and clears the way for a take private to actually happen this time around.
I've seen your past posts on valuation--any updated thoughts on value in a privatization?
I would imagine it would have to equal or exceed the previous $2.40 that Jeff offered, and, as a major holder of the company's common, I have gone on the record as saying I wouldn't support anything less.
My own assumption is that, with their already buying in roughly 2/3 of the preferred, at less than $16 average, when they were going to do an issuance of "replacement preferred paper," in the going private deal that fell through, at like $38 per share, the difference of $22 per share, over the aggregate number of shares, represents SIGNIFICANT value "accretion" for common holders that, I couldn't imagine has been more than offset by a decline in the value of Emmis's assets. In fact, my suspicion is that Emmis's asset values (stations and publications) are at least FLAT from 1 1/2 years ago, and possibly even modestly higher, overall. (I could possibly be wrong on that, though.) In any case, it is very hard to imagine how the value of the common equity, overall, could be anything LESS than what Jeff was willing to pay, 18 months ago. In my opinion. (Remember, famously, how Jeff still wanted to complete the going private transaction, with bellwether ETM having collapsed from $15 to $5, and CMLS having plunged from $5 to $2.25...but Alden didn't. That speaks WONDERS about that value that HE saw in these assets...even in the dark days of Aug-Sept of 2010.)
I also like the fact that this is a quadrennial political year....and that Indiana is going to see a tough Senate race in Lugar vs. Mourdock, and that Obama might again be vying for Indiana again, as well. Which certainly can't hurt from a radio ad standpoint. That, along with a recovering economy makes this a great LEVERAGED cyclical play, even if Jeff doesn't come back in and buy it out (as he has publicly suggested he is NOT inclined to be pursuing).
Meanwhile, I guess we have the sword of damocles of a potential delisting hanging over our head (which is apparently one of the things that has kept the stock under pressure). But, it's not really something I've personally been worrying about. Because I feel, despite the negative equity, that the assets are undervalued on the books, and I have lots of protection that allows me to sleep at night.