Hi centro, I agree in part re the $1.00 plus on the basis of just a 6 month extension. But don't forget we might also see confirmation of bids/offers or even an asset sale as part of the announcement. Now that would certainly put a floor under the SP and quite a lot higher than it is now.
However, back to the original point a 6 month extension is not factored in. In fact I think the market has been factoring in the possibility of bad news. The original extension had little effect on SP mainly as the market knew it would not solve CNP issues and were worried about on going bank support.
However an additional extension would show that firstly the banks were backing CNP (massive plus) and more importantly that the underlying business was strong and profitable and that they were keeping up with their re payments. If they weren't they wouldn't get the extension.
This leads me to your next point re offers for CAF or CAWF. The reason offers might be low, although we don't know what they are yet so not a fair argument, but assuming they are is because buyers thought CNP was in a position to have to accept anything that was offered.
An additional extension will send a message loud and clear that CNP had the backing of the banks and that buyers would have to pay a reasonable sum for these assets. Once this extension goes thru I think we are going to find that we start seeing a lot more buyers moving in with a few more dollars to spend.
So do I think the extension is factored in - no way. Far from if it was we would be a lot higher than this bargain basement SP we are currently sitting at. Btw if you note Glenn breaking his silence recently I would be thinking we are going to see a lot more than just an extension announced.
Hence the posters who want to see a $1.00 SP on the day of the Announcement might just get their wish.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
