Agree completely - CCO will never be the hero here. What we need is a finding of takings by the state, then we could begin discovery and any memos, estimates, emails, phone conv. by state employees could become a smoking gun. Of course litigating would become a huge burden for CCO, which does not have that much money. Don't be surprised if we see add'l offerings, convertible bonds or other dilution before this is over.
Ed's point about tobacco trials will become important, as the state will likely fear discovery and begin settlement talks in earnest once a taking decision is rendered. Until that time, FL is no worse off delaying an add'l year or two, given how much skin they already have inthe game. IOW, it's like an escaped death row inmate -- nothing more to lose. Might as well hold out as long as possible. What are they going to do, give you two death sentences? Of course abuse of power is murky at best and every step makes the state's actions clearer, expecially after the shot fired across their bow by the judge in this opinion. But technically there is a reasonable case that they are simply pursuing all legal avenues to enforce their position, and they haven't crossed over that line until told not to take another step. We'll see. A jury would not exactly be favorable to CCO, but a legal scholar, would have no choice. Then it all comes down to either a judges estimate of damages or his strict instructions toa jury on how to calculate them. Either way it's a crap shoot for both sides.
I expect a 2-4 yr time frame for closure. Let's get the taking argument out of the way, and then we'll see some progress. From a stock standpoint, don't expect the mkt to take CCO seriously until a true enforceable judgement is in the vooks. That means no major jumps in price until it's too late. Woyuld I buy more now? Not really since I own several thousand shares and don't feel comfortable making this a big bet in my portfolio. OTOH, it's still attractive to newcomers at this price. I expected the initial ruling to push it up much more than it has, and with that in mind it's still at a "discount" to its value given the current legal position. CCO has the advantage based on the last ruling, subject to overturn or another twist at any time, but for that alone it's prob. worth 2+ right now. |
