Traders Cooperative

[Joe Stocks]

CIT preferreds (A &C)look to end up with 1% of the company in the exchange offer. From what I recall the proforma shows book at about $11 bil. So the $850 mil in preferreds will get about $110 mil in book value, or about 13 cents on the dollar = $3.25 a share. That is at one times book. A restructured CIT could sell at a premium to book. IF CIT files bK they appear to end up with some fractional residual value of some sorts. Probably warrants.

I am sitting on the fence on this one. Still don't see the reward for the risk and uncertainties involved. This new exchange offer makes me think the exchange/restructure offer will go through. I may buy a little just to play with but I am talking about less than $1500 worth and I will not be buying in any accounts I manage for others.