I would not have thought this could happen, but with the total over-reaction to the Moody news (basically saying that without information from the restatement, a rating cannot be made -- not exactly a surprise,) we are now at a level similar to the last run up.
Since nothing has fundamentally happened (as the CEO said, the company continues chucking along as it did last quarter, the quarter before that, etc.) and all this is an exercise in paper losses, the company's fundamentals should still support a very high per share price (assuming, of course, that the the debt is restructured and the expected commitment from DirecTV is received.)
Now back at $1.20, after accelerating from $1 to $2 in a month or so, we may very well be set up for a second quick double (which, then, I think, will be followed by the $2 to $4 double over the next quarters.) If so, then if you doubled your money in the last run-up, now is the time to do it again!
Pete, i felt hittng the estimates was very important to the restructuring of debt. You seem to be more fluent with the financing side. I know some of the downsides, but what are the cons to restructuring under chapter 11, and why woudn't they take that route? Can they restructure without it at these levels?
If the company restructures as part of bankruptcy, the common shareholders are probably not going to fare well.
However, any company can restructure its debt at any time -- assuming that the loan terms allow for it -- by essentially paying of the loan with another loan. However, since early repayments are often associated with a charge and since the new lenders (who, btw, can be the same lenders that have the old loan) are not dummies, this may, in effect, be a very expensive approach.
In some cases the lender may recognize that the debt burden is crippling -- threatening to lead to liquidation or bankruptcy reorganization (a lose-lose scenario) -- and, therefore, agree to reduce the debt.
The situation with Unitek is complex. On the one hand the lenders are clearly working with the company, but, on the other hand, they are clearly also exercising all their rights. My guess (and it is not particularly qualified) is that the lenders will refinance Unitek's debt, giving the company breathing room.
For sure, if the company ends up in a situation where the common shareholders gets squeezed out, there will be a new series of class action suits based on the May/June actions of the company, and I am guessing these will be far more popular and potent than the current, rather anemic suits, and, so, I assume that the restructuring will be made in good spirit.
The thing to remember, I think, is that shareholders, insiders, lenders, and customers have the same goal here: To iron this out and move on to the business of making money.