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Technology Stocks : 360Networks - TSX - TSIX
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To: James Calladine who wrote (348)6/24/2001 4:01:21 PM
From: RockyBalboa   of 449
 
JC,

regarding the bonds. Your point is well taken that there is little to no hope. It further more suggests that there is no liquidation value left which means that the assets (excluding goodwill) are not even worth 10% of the stated value;

recovery is highly unlikely. Given its cash position it would be possible to pay the $10M interest. But I highly doubt that this was in the interest of the recent bond holders ...

So, no option value (for the recovery option) is contributed to the price; what is left is ch 7 or ch 11 and subsequent liquidation of the assets. And this is the point where I believe that, if properly done, could eventually yield a few percent more than the bond is trading right now. Therefore it would be straightforward of TSIX files for bankrupty as soon as possible; it could stop the bleeding and, they have to present a plan while currently nothing is visible.

It is perhaps not even in ALAs interest that it comes out of its default; this is a funny situation: ALA wrote off its preferred stock to 0 and now it can profit from selling common stock at virtually any nonzero price. This only holds if the equity is declared worthless later on (which appears to be a sure thing).

In actual $ terms, I have bought a small position, so it does not significantly change by profit/loss profile to the adverse given the row of short positions I maintain in this sector.
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