Now let's consider the number 7.754.623.
This is an interesting number, which I think explains quite well why the price of a Renren ADS oscillates in a narrow band just above 25 USD.
7.754.623, which I will call Z below for brevity, is simply the minimum 300 MUSD settlement amount divided by the approximate 38.7 that the defendants have to pay for each ADS held by a non-defendant.
Now, I would predict that, if the settlement is approved as proposed, the records are going to show that the non-defendants will hold Z ADS's (or something very close) on the record date.
Because this is the optimal number of ADS's that the defendants would want non-defendant shareholders to hold on the record date in order to minimise their losses.
By definition, if the non-defendants hold Z ADS's at the record date, the defendants will have to pay 300 MUSD, which is the least they can get away with.
Assume now that the number of ADS held by non-defendants currently is superior to Z.
Then the defendants have a very strong incentive to buy ADS's at the current 25 USD. Because for each ADS they buy for 25 USD, they avoid paying 38.7 USD later.
Assume now that the number of ADS currently held by non-defendants is inferior to Z.
Then the defendants have a very strong incentive to sell ADS's at the current 25 USD. Because they will anyway have to pay the minimum 300 MUSD stipulated in the settlement as long as the non-defendants own less ADS than Z, and each ADS that the defendants sell now for 25 USD can probably be picked up after the record date for only a few dollars, at most.
On this basis and assuming that the settlement will be approved as proposed, we see that the defendants will buy or sell shares to make non-defendants own Z ADS's on the record date, and the payment for each ADS will be at least:
300 MUSD - 100 MUSD (33% attorney's fees) - 950 kMUSD (costs and expenses) - perhaps 2 MUSD of other administrative costs
divided by Z.
This computes to 25.41 USD, and if the settlement will be approved, this should be the very minimum paid out.
Now, there is clearly an upside to this amount, because if the judge awards less than 100 MUSD of attorney's fees or the remainder of RENN actually is worth something, the gain will be higher. But 25.4 ought to be the floor.
A final thought: if non-defendants currently hold a number of ADS's significantly different from Z, we may see quite some movements before the record date - upwards with a limit of 38,7 if the non-defendants hold too many shares and downwards with a limit of 2-3 USD in case they hold too few (from the defendants' perspective).
But the large number of ADS's that changed hands when the settlement was announced would possibly have allowed the defendants to optimise their ownership without any problems, unless there are some restrictions for some reasons which stops them from buying or selling.
