It's not dependent on a buy out. If the company is liquidated, the preferred shares get first crack at what's left after debt. If you are shorting you could wind up owing the exchange shares that cost a thousand dollars each. No buyout required. All that's required is the company needs to show that it has money, some money, left over after debt is satisfied in a liquidation scenario.
We only know of a few assets from the court right now. They've got a little cash. About four and a half billion worth. They've got a valuable tax asset that could be worth about 5 billion cash to a big company sheltering income. They own twenty or thirty or fourty companies, and they only brought one of them out so far in court and it's only worth 400 million or so. Thirty more to go. Twenty more to go. I'm not sure. I've not counted them.
All we're betting is that there's more value in there than debt. And the preferred shares are going to get what's left. And who knows? Maybe theres even something left for common.
They said they had 30 billion under oath. Are you willing to go short and bet everything you own they lied about it.
With most uncovered short postions there's no money in going after someone. But if they didn't cover a few hundred shares and the shares went up to a grand each, that's a nice amount to go after and it could be a nice profitable litigation for some lucky lawyer.
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