Rotech Healthcare Inc fka ROHIQ

[scottmba]

My take:

The company has negative equity, thus all shares are currently underwater to the debt holders, and the closer the company gets to where they will to roll the debt, the shares will go down in price. It is essentially trading as an option on survival.

The contract spreadsheets appear to spread the contract over five years. That means the top-line impact will be about $18 million this year. With $44 million in interest payments annually, this contract will only be a marginal aid to relieving the debt burden.

This is a very short term play.