[ FIBR shares owned by ABCN - Hypothetical Doomsday Scenario ]
ABCN used the 674,419 FIBR shares that it owns as collateral against which it borrowed US$3 million from Credit Agricole Lazard Financial Products Bank. ABCN has serious cash flow problems. The bank holds these shares, and will sell them if ABCN defaults on the loan. The bank would have to sell these shares at $4.45 each in order to recover $3 million. If the bid drops to 4 1/2, the bank can sell a few thousand shares at 4 1/2, but not all 674,419. The bank needs to take action earlier. If I were a conservative banker, I'd be asking ABCN to put up some more collateral NOW. If the bid falls down near 5, the bank might be able to sell all of the shares at 4 1/2, a 10% discount to the market price. That would certainly push the stock below 5, which would trigger margin calls in some accounts, followed by further selling. Long-term holders watching this won't understand what's happenning, and will finally give in and sell.
If this really happens, it will be a great buying opportunity. Right now it seems a bit too early, because people on this thread are still optimistic. It seems that people are starting to lose faith, which is a good sign if you want to buy. Let's all hope for a real panic! |
