I do not think the SinkHole's share price would be zero just yet, even with a regulatory takeover of the insurance subs. It would take some time, a few years even, for the holding company's Ch 11 case to work toward Ch 7, during which time there would be a number of clowns including some that own the stock now, that would be buying for pennies per share, convinced that there would be some value at the end of the trail. Witness the TrainWreck (Trenwick) and Majestic Capital (formerly CRM Management) as two examples. There was no value there for the shareholders when it was all over, and with the outstanding debt on the SinkHole's balance sheet, there will be none here either. The entertainment value will be when No_Strap_That_Damned_Us_in_98 (Real screen name Not_Stradamos_98, or something stupid like that) will come on and tell us all about loss reserve analysis.
So by extension if it goes the other way, inflation and interest rates pick up, then this thing could be dead in the water -- or worse. You think inflation and interest rates are going to remain low? You got faith in those forecasted growth figures? Especially after a decade of disappointments? How do you think the valuation got to where it is today? One reason is that, over a decade, managment has sucked out all of the tangible value from the company's balance sheet, leaving behind a pile of intangible assets (that total 2 1/2 times book value). Before you preach from a Bible, you should first look at the record.
I don't think it is new coverage. just a new report. Lake St has had this turd on its coverage list for some time and whenever an analyst rolls out coverage they usually issue a P/R. No such P/R showing on the firm's "News" page.
So now you got someone on the BOD that knows how to sell companies. Question is, can he polish this turd and get a price for it?
Referring again to your comment about all that is necessary is to fill in the blanks, why should this take any time? Especially since SinkHole mgt could have been filling in the blanks while they were wrapping up the 10Q for delivery to the SEC. If it was that easy and such a done deal, the shares would be pushing harder toward the $2.50 takeout price. Let's assume a 10% annual discount to the takeout price, for completion in about six months (Nov 15): That would suggest a fair market value of about $2.35-$2.40 right now. And 10% annual is a monstrous discount, especially for a deal that is as tight as you seem to think. I suspect that as events continue to unfold, it will be your sphincter that tightens.
Another [im]poster blew and cooed about $50M of revenue with a 3% margin. Putting the math together suggests a valuation of about 90-95 cents per share. In order to move up from that one has to make some assumptions about growth, which means that the same person has to make some rather aggressive assumptions that, after ten years of mediocrity, name changes and business model changes, this company will finally figure it all out. Yeah, right!
If someone wants to think about a takeout, they had better consider two things. First, intangible assets amount to 2 1/2 times book value. Guess where that puts tangible book? Second, there are no synergies or expense savings available to potential buyers unless they choose to move the rest of their operations down to the boondocks in Arkansas. If they do the normal, acquire the company's assets and spit out the people, they will owe a big bill to the state, refunding the grant that was granted with strings attached.
Adinvestor has nothing to do with my silence. Nothing going on. Why don't you write another stupid article for Seeking Alfalfa Wheathead?
Do the math. They may be big next to your bank account, but in the hedge fund world they are small potatoes and certainly not market leaders.
Gonna get the proxy out in two weeks, eh? Not a chance. This company can't mail in its electric bill payment in two weeks!
You are not 60 days or less away from a closed deal. SinkHole has still not delivered a proxy to its shareholders. Gotta give 'me time to vote, then you have to have a meeting.
Market's irrational? Not hardly. Individual investors/speculators irrational? Now we're talking.
Bonds appreciating eh? Did not know Treasuries were doing so well. Take another look at the Q. Every category of fixed income investment declined in Q1 except US Treasuries. Company has had to liquidate its investment portfolio to meet the cash flow needs and it is putting the money into Treasuries to insure quick liquidity.
Float???!!!!???? You idiot! In this case the float is going the other way....out the door! $2 million per day. Operating cash flow negative by $190 million in Q1. What float? You've been reading too much about Buffett.
I'll find another. There are always failing insurance companies that suckers seem to want to believe in. Keep your eyes on MIG
Read, carefully, the amended merger agreement again, and then read, again carefully, the discosures in the footnotes, especially those pertaining to regulatory actions.
That is one impressive discount value the Market is using to calculate the present value of $2.50 to be received in five months...