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

To: paulelgin who wrote (49186)	8/22/2012 9:38:06 AM
From: Jurgis Bekepuris	Respond to of 78751

I think you are very optimistic when you say these figures will be decreased somewhat in the coming quarters From the tables in the documents, there are still potentially about 5M claims that can be allowed or dismissed. Assuming they are all allowed and assuming each claim gets 3 shares of GM + 3 warrants (per your ratios from Q2), the trust loses over 15M of shares+warrants in addition to 5M dilution. You are left with 8M shares+warrants to be distributed over 35M of units. That's less than $10 per unit at current prices. Plus there might be further share allocations for taxes and operating expenses. I think this is the worst case (not counting further GM stock drop), but I might be mistaken. Obviously, if only 10% of claims are allowed - optimistically realistic number perhaps - trust loses only 1.5M shares+ warrants. You end up with about $27-30 value. So IMHO, my previous numbers stand as optimistic upper point. Make sure you really understand the currently ongoing trial if you invest. It seems that there is a trial decision coming up about allowing or disallowing a large number of remaining possible claims. It could be the key of how many shares trust loses to claims. I can't say I understand it fully. And I seriously suggest shorting GM to preserve your possible gains. If GM drops to $15 or so, you won't see any gains even with 10% claim allowance rate...