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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Don Earl who wrote (15950)	12/25/2002 3:24:54 PM
From: TimbaBear	Read Replies (1) \| Respond to of 78627

Hi Don! .26 would be terribly expensive under the circumstances. Once the plan is approved, the existing stock will be canceled, and new stock will be issued to everyone EXCEPT existing shareholders. You're basically looking at a 100% chance of a total loss. While I agree that the "New Common Stock" is being issued to only the unsecured creditors and the asbestos trust, I disagree with your statement of ...."100% chance of total loss". The existing shareholders under Class 11, Treatment, per the chart listed, in part, on page 19 of the reorg plan....and I quote: "If the Holdings Plan of Liquidation is approved by the requisite shareholders of Holdings prior to the first anniversary of the Effective Date, the Holder of the Equity Interests in AWI will receive the New Warrants (which will be distributed in accordance with the Holdings Plan of Liquidation)." As I said, I'm buying the current stock to get the warrants. Are you saying that the holders of the equity of Armstrong will have no ownership interest in the company that comes out? That doesn't make sense to me. Why would management take the trouble to treat all other classes fairly and then snub the shareholders who they demonstrated such respect for over the entire course of the business? Yes the existing shares will become null and void. Not disagreeing with that. But that doesn't mean the existing shareholders won't be thrown a bone (or more). At 26 cents a share, the bone doesn't have to be very big for one to make a nice profit. If you were willing to take a position in a VERY highly speculative play, you're only real chance of coming up with something with any kind of market value would be the senior notes. While I can see how you may feel that way, I would guess that the Senior Notes haven't been discounted that much because of the way they are being guaranteed under the reorg. plan and would represent less of a bargain than the current common stock. Typically this strategy would be a great way to get a great yield on your money if you felt that the company would survive long enough to pay the debt (like some of Tyco's notes a few months back), but I suspect (again, I haven't explored the pricing on ACKHQ's debt) that the better value here is the common stock. Have a Merry Christmas and don't buy stock with a Q on the end of the ticker symbol. Thank you for the well wishes and the advice. Timba