Hi kthomp. Please excuse my ignorance but I have a question. You often state how the new investors would require such a high percentage of the companies in order to invest the capital necessary to meet whatever the requirement ends up being.
My question is why would investors never invest in commons at a much higher price than they are today? I understand that they then wouldn’t own a high percentage if the PPS was high, but if the commons were worth, say $100/share, without the SPS/warrants/NWS, then why would new investors not be willing to pay a discounted price from that $100 (assuming SPS/warrants/NWS are cancelled just for the sake of example), even if they ended up with far less of the companies? Could the Gov not just halt trading of the stock, cancel SPS/warrants/NWS, and do a secondary offering at a much higher than current PPS (but still at a discount to the price that the market would likely price it at given the companies fundamentals). Then, open trading back up on NYSE and it’s a win-win. I realize that you don’t believe the warrants will cancelled, but humor me here.
In other words, if many funds invest a lot of money in any particular stock that appears to be a good value based on their analysis of P/E and so fourth, why would new investors in F&F not approach it just like any other investment where they will buy it if they think it is a good value at whatever the market currently has it priced at?
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