From $4.81 straight to $2 per share. Or $0 if shareholders are really dumb. If there weren't already lots of opportunities to lose money on this stock, somehow certain investors are gluttons for punishment.
As noted in my earlier post, even with the $30 billion Fed backstop, it is not baked-in-the-cake that this deal is a winner. And what about those for whom the guarantee isn't forthcoming, say, a private equity consortium, a sovereign wealth fund or a foreign bank? Forget about it. They're not buying.
Yes, as my esteemed blogging colleague Andrew Clavell notes, it is ironic that the very shareholders who have gotten terribly hurt will be the very ones voting on the deal. But in the event that the vote doesn't support the deal (which I believe is very unlikely), then what? This simply tosses BSC (not to mention the equity holders) into no man's land. The Fed will be enraged, Chapter 11 will be in the offing and we may see our own version of financial markets martial law....MORE