Roadrunner Transportation Systems Inc. (RRTS)

[ICXCNIKA]

I think that the rights offering will be completed before any buyout.

At that point I expect:

- Elliott will have more than 51% of the company. That is to say complete control of the company.
- the company will have no meaningful debt or preferred shares
- there will be 950m shares outstanding

I believe Elliott will use their control to begin an operational turn around. They will also have complete flexibility on changing the capital structure. They may try to sell the company, or once the operations have turned around leverage up the company and use corporate buybacks to monetize their position. It is possible that they could take it private, but I am unsure about their game plan.

At this point I believe we have two opportunities to profit:

1) by selling the issued rights if they are in demand. This could be substantial upside, given that we have 22 rights per share, but I am not counting on them being in demand.
2) exercise rights at $.50 and hold common stock for the next year or so and look to benefit from Elliot's turnaround and monetization, hoping that Elliot's incentives will be sufficiently aligned with ours that they will do what is best for the common stock holders. I think this will be a 2 - 6x over the next year, based upon the $2.2b in revenue.

You should be aware that Elliott will likely us a reverse split after the rights offering to bring the stock price up. I do not think this hurts us, as they are not doing it to dilute us by issuing more shares.