Assuming you are correct that the market is pricing BBI so low because of Beppa dilution, then in fact, the price should essentially be 0. That is, unless the market is factoring some liklihood of the dilution not happening.
I would have thought the chances of BBI scraping together enough net cash asset sales by 2012 is very high. I think even you believe DBCT will sell well. So lets say the chances of the co. having enough cash to deal with Beppa is 50% by 2012. That would put expected NTA at about 50c - the average of 0(max dilution) and $1(no dilution).
50% is conservative IMVHO. Based on track record, and time available, I put the chances at 80%.
I disagree that the market is factoring in dilution in their pricing decisions. I believe they think BBI will fall over due to inability to re-finance. The GFC could easily get alot worse - just ask Mr. Soros. Perhaps though, plently of other co's should be trading at <%10 of NTA if that is the case.
BBI Price at posting:
6.0¢ Sentiment: LT Buy Disclosure: Held
