hi steelcouch, that's a very good question and not an easy one to answer.
Without doing a solid Monte Carlo analysis I can't give a number with a reasonable amount of conviction. Long term, the majority of my probability outcomes will place very little or no value on GBG as I understand that they are liable for their share in the JV. Don't forget that the value of the assets only has to drop by about one third and the enterprise has a negative NTA due to its high gearing.
But because equity is only liable for its initial value it always has value until bankruptcy becomes inevitable with debts larger than possible asset recuperation. I place the long term chance of the company remaining a going concern as fairly low but there is a small chance it does and the potential gains could be very big in these scenarios.
Where that puts a price which as cheap I'm not too certain but I try to stick to my long term view and keep from entering a company which I think has an unviable model across most of the probability spectrum of my predicted exogenous outcomes and without the endogenous potential to become viable. It may look cheap as a trade in a specific situation but I try to tell myself to stick to my long term view when looking at taking a position that could get me caught on the opposite side of my long term view - the market is a strange beast and can be very hard to predict in the short term despite it seeming to follow trends and patterns at times.
GBG Price at posting:
22.0¢ Sentiment: None Disclosure: Not Held
