Re: MTLQU
Thanks for your analysis, Jurgis. Here's the math I used:
30,158,595 units currently issued or pending issue.
The Trust currently holds:
23,258,394 shares of new GM ($21.63)
21,143,880 new GM warrants, which can be exercised at $10 (I'm calling that $21.63, since they can be exercised at any time)
21,143,880 new GM warrants, which can be exercised at $18.33 (I'm calling that $21.63, since they can be exercised at any time)
That's $1,417,763,311.02 in value, divided among the 30,158,595 units. I'm not sure how dilutive the warrants are to GM shares.
Anyway, that calculates out to $47 of potential distributions per unit.
In 2Q there were 121,650 in new claims against the Trust, which meant 484,167 shares of new GM were distributed, and 440,373 of each warrant were distributed, along with 1 unit for each claim (so, 121,650 new units issued).
Essentially, right now a unit-holder would get 0.77 new GM shares per unit held, and 0.70 of each warrant, if there were no more claims against the trust over the remainder of the trust's life. This is unlikely, but, 0.77 shares of GM at yesterday's closing price, equates to $16.65 per unit, when I paid $15.20 per unit, and the 0.70 warrants equates to $15.14 of each warrant, per unit.
Given the fact that there will be more claims against the Trust (though, who knows how large those claims will be - one would assume most of the bondholders have been active in making claims already) these figures will be decreased somewhat in the coming quarters. The $10 warrants should be a fairly safe bet for remaining above their exercise price, the $18.33 warrants, maybe not, and the GM shares will always be there.
I'm not saying this situation is any easy triple, or even a double (I've never invested in a liquidation before), but I do believe these units offer the potential for an adequate return on capital as currently priced.
Paul Elgin |
