Although there's no guarantees, the presentation on 26 Feb was fairly encouraging (bankers supportive of refinancing, business generates a lot of cash, quick to change down gears with a very flexible workforce, etc). IMO, the fears and uncertainty surrounding the company are likely to be somewhat lifted on May 11.
I've tried and am unable to come up with a convincing scenario where BLY's EPS drops to 2.5 cents in 2009. On a P/E of 6, that would make today's SP of 15 cents about right. So to my mind, the SP should be sitting somewhere between 15 - 51 cents:
As we all know, short term debt is what is most likely depressing the price, but I can't see how it's rational any more. Even if interest costs from refinancing and further reduction to earnings added up to an extra 20 million of costs, that would only lower forecast EPS to around 4 cents.
Z
BLY Price at posting:
11.7¢ Sentiment: None Disclosure: Held
