The turning point for the CTs will be ...
I have been here for months, both observing and picking up the various flavors of CT shares along the way, patiently waiting (painfully patient, you might say) for the critical turning point for these special securities. That turning point? The Effective Date. We need to get to that point to find out if there will truly be any reasonable and decent value to the CTs.
I have observed all the great DD, and the attempts to rain on the parade by naysayers (you know who you are), and my conclusion is that we can speculate all we want about dividends and deadlines and assets and such, but we don't stand a chance unless the CTs are ruled/considered debt. The Effective Date, from my understanding, will be that time when our brothers and sisters in preferred and commons will be delegated to the big share of pie in the sky that may somehow become something real and edible if Lehman can recover many billions of assets down the road. In the meantime ...
If the CT shares do not get tossed into that LAMCO pot, I believe we will see some amazing things happen. Mind you, if the CTs get paid off at 20%, this will be a life changer(especially for me), and I will be very happy about it, as will many others. However, if they do not get the payoff, but, instead, simply are left alive with the high probability of dividend recovery and payout, share price will likely escalate beyond 50%. There will be long-term investors looking for appreciation and dividends, and the CTs will be quite attractive.
These sort of remind me of the WAHUQ shares, which the hedgies bought for pennies back when WAMU was unrightfully seized. Those WAHUQ shares later rose into the $30 range for a while, until the hedgies got spanked by the Court for IT. Lehman CTs are capped at $25, but that is more than enough, considering the fact that you can buy them now for an average of .10 or less.
So, CT investors and pundits, let's start working on that Effective Date. Let's investigate and see if we can pin it down, when it is due to happen, or when it is supposed to happen. That's all I care about now. Hey, it's cool to dream and plan for dividends, but it's like worrying about taxes before making money. Make the money first! Those dividends will be the talk after we confirm the CT status. Lehman CTs must first rise up above the LAMCO melting pot, and then we can all do the happy dance. And I don't dance much at all, but I really want to do the happy dance!
Chessman
