News: SGH Watchstone Group says received correspondence from firm of solicitors for SGH, page-105

Some points to ponder for those who are thinking about selling/buying SGH shares.

1. about two months ago, more than 90% of HC posts thought, banks would recall their debt which would lead the company into VA. That did not happen because hedge funds bought the debt and agreed that they would help the company to continue to do the business. ( SP increase from 7 cents to 13 cents and those who did not listen made more than 50% gain within a few weeks of their trade)
2. Then another group of posters raised the issue of impending $32 million interest payments and said that the company was not solvent and the share price would go 5 cents. That did not happen because new debt owners has decided to capitalize the $32 million interest payments. ( SP increase from 10 cents to 13 cents and those who did not listen made more than 25% gain within a few weeks of their trade)
3. Then the same HC posters said the company does not have working capital and will go bust and the share price would be worthless. That did not happen because new debt owners approved $40 million debt facility for 3 year period. ( there was no significant price response)
4. Now the company has informed the market that they sue WTG for fraud. ( ( SP increase from 8.8 cents to 12.5 cents and those who did not listen made more than 40% gain within a few weeks of their trade). Some posters say, if they win the case, money will go to hedge funds and shareholders would get nothing. I do not understand what they are thinking. If hedge funds get money, the debt will go down substantially. That will increase EV of the company accordingly.
5. Same group of posters who has been wrong on all first 3 points, are now telling that under the recapitalization plan, share price will go down to 1 cents, 4 cents, and 5 cents etc. New developments suggest me that, they are going to get a huge surprise on this one too.

In my view, get ready for an unprecedented price action this week. That is all I can at this moment.