Sold More YRCW
Synthetically and by buying puts. Paying a premium but I think it's worth it.
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3 comments:
what is the premise for the YRCW short- the massive dilution? i haven't had time to look at...
Assuming 100% participation by bondholders in the exchange offer:
The current equity gets 5% of new equity, and then the union gets cut in for 20% of the new equity after that, and then management gets cut in for 5%.
So current equity = 0.95*0.8*0.05 = 3.8% of new equity.
Current equity valuation is $71 million which implies the post restructuring equity would be worth $1.86 billion. That is more than the entire enterprise value today.
hmm... i will look more tomorrow.
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