I think they could and are likely to in some form. Operating cash flow was positive. If they can refinance, then yes. They could refinance for 70 million and call the preferred shares with a good buffer. It really depends on the refinancing. I don't mind waiting six months for a payout on the preferred shares if it will provide a favorable refinance. I want sustainability and right now the preferred shares look more nice than the stock.
What is shadier is at above $3.00 per share you gain margin ability. I have decided to not use margin but I think their intention was to run it up above 3, have people buy more on margin, short as margin was available, maintenance calls below 3, cover with the sell off. My guess is that they do this often. I had a lot of margin one day and then it left. Either that or they are targeting me as I went from $9k in october to 50k in January. Mostly due to this opportunity. Risk/reward is very nice even at these levels. Earnings report will display how it is. We should see a significant drop in current liability as they moved some of the long term debt to the current liability. Hope this does well.
Preferred shares got destroyed due to noncompliance to the notes issued last year. Most likely they are in negotiations with the notes. They still do not have the 2 million dilution that was required. I bought it at 75 cents as spec play. The thing is that it improves the company's cash flow by not paying out. Once we hear about the end of the terms, most likely they will stay the same. We need to have 2 quarters of compliance in order for the preferred shares to distribute dividends. MHR loan was great news. We will likely hear more on the annual report.
They need 2 million in equity by December 31st to remain compliant with the notes. This 2 Million has been made clear that they will likely not be able to accomplish it. Especially with the tank in the share price. They cannot obtain a loan, it according to the 8k has to be equity. My guess is that they negotiate a very strict deal by the end of December. It will benefit the Notes very greatly and they will make some good cash but will keep us afloat until conditions improve. If they have a favorable deal that keeps the equity at least valuable, then we should see a good jump to $0,30 cents a share. I think though it will be another year or so for the preferred shares to payout if at all. However, if they do, that would be the deal of a lifetime. The problem started with the delay of the facility. Had there not been any delay, we would have been better off. My guess is that the deal will increase the royalties significantly and will pay down the notes. That is what I would want is the reduction of principle. Especially with interest rates increasing.
Downtrend discovered. Star Wars Battlefront will underperform. Disney will likely re-evaluate there relationship with EA. EA is bad for the Star Wars Brand. I expect a 10%+ decline in the next few weeks. After that it may do well. Long term this company knows only 1 thing. How to bank on established franchises. They have little to no skill at building them. If they can finally do that, then they will do well.