Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: paulelgin who wrote (49179)	8/22/2012 12:27:20 AM
From: Jurgis Bekepuris	1 Recommendation Read Replies (4) of 78715

MTLQU - I cannot say that I understand everything that is going on, so take the following with a large grain of salt. :) Are you just dividing 1.3B in liquidation assets into 30M of units outstanding based on this? You should probably be dividing into 36M units based on possible "diluted" count. This reduces your possible gain to $37. Furthermore, the trust holds GM stock and warrants. The price of GM stock dropped from $26 in March to $22 now. This reduced the value of GM stock by 30% and the value of Series B warrants ($18.33 warrants) probably by more than a half. Looking at June 10Q , there are 36M units "diluted" and 1B of liquidation assets. This yields about $28 per unit assuming GM price does not continue to drop. Distribution may be higher if not all "dilution" happens. It is not clear to me when the distribution will happen - probably when all claims are resolved, but that's not clear to me either. So really, if you buy this, you should short GM to preserve the current gain factor. If you hold it naked, it's a levered GM position (Series B goes to ~zero if GM drops below $18...) purchased with a discount.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next