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It is my understanding, from what I have heard, that they generate a tremendous
cash flow, but it is not enough to service the current debt. Therefore,
they will reorganize into another company, liquidate a great portion of the
debt by giving the debt holders an equity interest. The current stock holders,
both common and preferred will end up with nothing and the bond holders will
be OK. whether it happens that way or not, that is the rumor that I have
heard. Wish you luck, Ira.
Don Ewers wrote:
04bd01c291a4$44ab0d40$4f2c343f@xxxxxxxx">
Thanks Ira,
I think the "void" right now is whether
there will be a liquidation or not? I am hearing not due the importance
of their internet backbone. The common shareholders are screwed I agree,
but I am not sure if that also applies to an "cummative" preferred? I would
normally think they are looking at zero also, but if so why are the shares
trading a $7.00 today (vesus normal $25.00)?
don ewers
----- Original Message -----
From:
ira
To:
realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, November 19, 2002 5:05 PM
Subject: Re: [RT] Worldcom Prefferred
to the best of my knowledge the only assets to hold in a company going
bankrupt are bonds that are collateralized by hard assets. Preferably
real estate. Equipment is usually a 10 cents on the dollar thing. If
they can't come up with a scheme to come out of bankruptcy then the scavengers
go to work on the bits and pieces of value and stockholders don't get
anything. Take a look at Global Crossings as a example. Or go all the
way back to Penn Central.
Don Ewers wrote:
05b001c2901a$a517e030$0c26343f@xxxxxxxx" type="cite">
I forwarded a page from the "pink
sheets" that indicates the preferred is trading at 5.75 (annual high
was 25). Has anyone on the list had any experience with a preferred
of a bankrupt company? Is this headed for zero or is there any hope
to recover the 77% loss suffered? Any help or insight would be appreciated
so i can pass it on.
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