ExpressJet (XJT)

[downsideup]

Note they have clamped down on the trading range... keeping it between $0.38 and $0.40. Meanwhile, as oil drops and the rest of the industry has had back to back days up 25%... XJT just gets squashed down in the box. It is clearly worth something more... is clearly being contained in the range... with the relaxation in downward pressure in the industry building in some coiled spring type tension here that should be released when ( or if ? )the debt issue is solved.

I do expect that there is little interest on the part of the note holders to see this in court... and I can hear the judge... "Let me get this right... the business is sound and they were making timely payments on the notes, but they are in BK only because you wanted to take over ownership from the common shareholders? " As a common shareholder, I'd want to see the court look at trading records to see who was selling/shorting as the share prices dropped as much as was necessary to generate the problem.

I've also seen solid companies driven to BK by debt holders. Most notable was Chyron... They make the systems that allow the tickers to scroll across the bottom of the TV screen. Doing just fine with the business, but their banks got in a pissing contest over which of the two lenders had priority in the event of a default... thereby creating a default. The company issued LOTS of warrants to common shareholders during the process... and I exercised every single one of them to which I had a right and made a killing. I expect XJT may have LOTS of room to engage in similar tactics. I expect if they were to issue warrants or rights to common holders now, or in the event of a BK, they might be able to generate a WHOLE lot of cash with shareholder conversions, that would have the impact of "diluting" with shares allocated to common holders... Given current share prices, investors would be smart to do a deal like that... profiting from the conversion shares, while also building profit back into their pre-existing holdings.

When I look at the overall picture, I see the company holding most of the cards... which doesn't necessarily mean that they will play those cards well ?