Hi buffett, very good post mate as always. One could argue though that current SP was a reflection of the markets believing CNP would fail not succeed. Mainly due to the constant media blitz of negativity and the shorting we saw. Personally if the debt is extended I see a return of SP to at least the levels pre the last extension.
The big thing now is the media has turned around 360 degrees and things seem to be going in CNP's favour again. A change in sentiment can do wonders and an extension would give them time to sort out debts. Plus it shows the markets that the underlying business is still performing well which was a worry the markets I believe.
Afterall if things were not going to get better why would the banks bother to grant another extension? Mind you I could be wrong and it may turn out to be a longer term investment but on the other hand I could even see an AFG style run on the cards. In my opinion the market was worried banks would shut CNP down and the first extension was going to be the last.
And let's face it it wasn't enough time to sort things out and markets knew it. But a new extension would prove not only that the core business is performing well and show the markets CNP was most likely to survive but that banks were willing to work with CNP to sort out the issues. I see a big week ahead for CNP and a sharp move north in SP. Time will tell of course - good luck BTW and thanks for the informative posts.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
