Too right r36. I've spent the last few weeks since the coal sale reviewing my investment in this company, and I've figured the market is pricing this company to fail (i.e. we've most likely bottomed out), so any success will breed some strong upside in the stock.
By May 15 2012, CAP will be in one of these five positions. I have listed their liklihood from high to low.
1. BMG defaults, and we should, if I have this right, grab back their interest for nothing. The door opens for another JV.
2. BMG don't pay up the cash, and we buy back their stake for $13M. The door opens for another JV. The question is, where do we get the money from to fund this?
3. BMG pay up the $25M. CAP has a cash and investments balance close to $35M. The BFS goes ahead. As much as we would all like to see this, BMG is riddled with financial issues and this outcome is thus quite unlikely.
4. BMG don't pay up the cash and CAP continues to sit on their hands and do nothing. While this seems just as likely as #2 at face value, I don't believe Nick will be prepared to let this drag on any longer. If the chance to terminate the JV arises, I think the company will take it with open arms. The BFS has already been delayed enough as it is, and sitting around and doing nothing will only prolong this further.
5. We get taken over. Someone would have pounced already at these prices if they were interested, so I can't see it happening.
Interested in anyone else's thoughts on these outcomes and which one they see as most likely.
CAP Price at posting:
22.3¢ Sentiment: Hold Disclosure: Held
