This is all hypothetical (but based on past events with other companies in similar situations)...
They're going to have a meeting in late April, I believe, to vote on various proposals, etc...and that's when I think they'll approve the "existing shareholder right's offering" as part of the plan > and I also expect that whatever DISCOUNT they'll eventually give to creditors on new shares, in exchange for cash infusions, the existing shareholders will get THE SAME DISCOUNT. (in the case of DHT, when they finally filed with the SEC to sell new shares, they gave a 37.5% discount, based upon the price of the stock, at that filing date...)
Sooooo...I'd sort of expect that when it becomes more apparent that EXISTING shareholders WILL receive a DISCOUNT on new shares, the stock price should begin to move upwards, as investors desiring to participate in that DISCOUNTED offering, will have to buy some current shares, in order to 'get into the deal'....they'll start queuing up...getting in line.
Just a guess (or an example, if you will)>...I'd not be surprised to see the shares move up to 90 cents-to-$1.00 , pre offering...Then the company finally makes it official via the SEC filing...and well, if the shares are at $1 at that time, they could announce that the new shares will be priced at 70 cents (as DHT's were)...maybe a 30% DISCOUNT?)
.,...That would be nice...Yes, it'll be quite dilutive...but what counter-price do you put on a company that was near BK, now being able to go foreward (new life !!...survival!!)...and remain a going concern...I think that'll offset much of the dilution (i.e. much of the stock's price now, is based on the fear and angst of a possible BK...but once you move away from that scenario, well, things get a bit less fearful...I'm looking foreward to how it unfolds...Just a VEGAS bet...but I like the odds...and the 'risk/reward"....
ps...just a head's up on SBLK...It's been bleeding...probably because down at current price levels, the 30-day moving avg won't stay above $1...i.e. I'd expect a delisting "warning" around mid-April (?)...
And well, once stocks like PRGN & DHT received those warnings, the stock headed back up, after that....So, keep an eye on SBLK...I'd start a position on the day they get that "technical" notice...but keep it small as well...never know if they'll also dilute at some point...hopefully not.
Well, the KEY for me would be if they do the same thing DHT is doing...i.e. If they issue new, dilutive shares, they give the EXISTING shareholders first rights to buy more at a good discount...so you could cost avg them.
Yes, other entities will also get some shares, and it will be dilutive (negs)...the positives being the offering rights to existing shareholders ...a discount on those new shares...and finally, the fact that if they raise sufficient cash to weather the 'storm' and survive...then it's about waiting for better times, better BDI's, etc.
Bottom line : if they do go with an "existing shareholder" right's offering...the ability to add shares at a good DISCOUNT, then it's worth some Vegas money, IMO...If not, then I'd not make the bet...but of course, since that deal has been 'floated'(mentioned), I just wanted to get some shares down here (early)>...i.e. if they eventually finalize such an offering to current shareholders, then others will probably start buying the existing shares, in order to get in on the deal (qualify) - and that should push the current price back up. **(I'm going to be able to buy quite a few DHT shares at 70 cents, so I'm happy with that deal).
ODDS?...(hahaha)...well, if they go BK, you lose 100% / if they take care of the creditors and in a couple years, things get back to more normanl times via BDI rise, then you could see a several hundred % gain, from current levels...200%? 300%?...Hard to say - BUT I LIKE THE BET...JUST KEEP IT SMALL...Maybe 1-1.5% of your portfolio...imo (others make have a diff opinion...be we all have to make our bets separately..."tolerance / risk-reward")