How to Play the Big Savings and Loan Lawsuit Message Board

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Non-Tech : How to Play the Big Savings and Loan Lawsuit

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To: Robert Northington who wrote (22)	7/12/1996 4:44:00 PM
From: Robespierre	of 63

THE MATH IS CORRECT, YOU ARE MISSING AN IMPORTANT POINT. #1 Friedman analyst says CalFed could get $18/Share #2 CalFed has 49.31 shares outstanding #3 CalFed holders only get 75% of the lawsuit money since CALGZ holders get the remaining 25%. #4 If 75% of the money = $887.58 million (1849.31), the total estimated award is therefore $1.183 Billion of which 25% goes to CALGZ #5 There are 5.1 Million CALGZ outstanding #6 25% of $1.183 Billion divided by 5.1 Million = $58! Therefore CALGZ has the maximum potential of $58. [1849.31/.75*.25/5.1 = ~58] From the release: California Federal Bank (CAL-$18) -- At the current price, Calfed trades at less than 10 times 1997 estimated reported earnings. According to our model, Calfed could receive in excess of $18 per share. We therefore recommend the purchase of the stock up to $21 per share. With an ultimate potential upside of $58 per share according to our model, the Calfed warrants (CALGZ) are also an interesting play.

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