Hey Bkshadow,
You have many good points there, but I think that there is more to consider here.
Many of us long timers have been here since 2006 or so. At that point and up until, really, the end of 2010, the value of the LTWs has really just been about the LTW award itself, including tax gross-up.
In early 2009 through 2010, large groups of hedge funds put in $$ to purchase up significant blocks of these securities. We know this because many of us (including myself and Bluzie and others) were contacted by these hedge funds at one point.
Thus, if you look back over the previous 2 years, you will see a slow steady accumulation of the LTWs in the sub 0.05 area.
These are also the funds/investors who are bank-rolling the adversary proceedings. Thus, most likely a majority of the float is held by large institutions (their names can be found among the many listed in the Broadbill filings) who are holding until they get their rightful litigation award amount (between $340 - 600 M from the filings)... the $600 M is a bit aggressive, but nonetheless a lot of money.
Thus, much of the float is locked up by people who are, in general, disinterested in the machinations of the BK case, other than the adversary proceeding with Broadbill et al.
Thus, I would suggest the following dynamic is going on:
(1) The majority of the float (maybe up to 50% or more) is locked up by people who are only interested in getting their $3.00/LTW + shares and averaged in sub 0.10 (I'm in that camp).
(2) The LTWs have been completely ignored until middle of 2010, when Steinberg et al. showed up to literally "save the day" for the LTWs. And I mean no one cared. Several of us (myself included) e-mailed, called, mailed letters to the SEC, DOJ, BK court, Jones Day, WGM, the EC (at the time not Sussman)... no one even knew about the LTWs, except for Jones Day...
(3) Given the ever increasing exposure and illumination of the LTWs, more retail investors have been getting into this issue, potentially driving up the price of a very low-float pink-sheet stock.
(4) Post-POR and the acknowledgement of the reserve just further solidified and exposed the LTWs to a broader audience.
(5) now we have arbitrage players moving between Ps and DIMEQS, etc... which is all good stuff and I applaud those who are able to move between them. The long and short of it is, before 07/2010, there maybe 5-7 posters here regularly (a few others who hung out too)... now we have many more, indicating that LTWs are getting more attention.
Given (1) - (5) above, it's natural that the LTWs went from a hidden, dark-horse, orphaned, grey market issue to a now modestly traded issue. Since it is still ~70% (rounded) below par-value... clearly a lot of skepticism is still baked into the price.
Anything short of $1.50 is truly a bargain, since I'm with Bluzie in that I see a 90%+ likelihood of success here, whether that success is in Cash + stock (in Newco) or other things.
It's going be very hard to prove that DIMEQ = equity, since, by the definition in BK court, DIMEQ fits all the characteristics of debt, as Bluzie always points out!
Believe me BKshadow, we lived under a very cold, very wet blanket for years and it's just now getting warmer and drier out. The year spent at sub 0.05 was one that I will not so soon forget.. when no one even knew what an LTW was.... should have bought 1 Million back then, but I didn't...
At any rate, your thoughts are always welcome! Wet blankets or no.
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