What will the new shares be worth? Of course we can't predict what the initial price will be, so maybe it would help the discussion to focus on what how the stock will be valued based on earnings. There seems to be a general agreement that if the company were not faced with its current legal situation it would be willing and able to show a profit. Let's say, just for the sake of argument, 12 cents a share on 172,000,000 shares. (I haven't read the earnings statement lately, so anyone that that is better informed feel free to jump in with more accurate information.) IF they reduce the number of shares to 10,000,000 that would mean earnings of about $2.06 a share. All that would be needed is a P/E of between SEVEN - NINE to bring the stock price up to the warrant price.
Just my opinion, but I wouldn't be surprised to see earnings for the restructured company that are significantly higher than the hypothetical ones I've used. AND two years down the road I wouldn't be surprised to see a P/E of 30 or 40.
Then again, with this stock, who the hell really knows. |
