sloppy wording cost me over $100k

Like many others, I too decided to take a modest profit when the refinance deal was first announced. Having just recovered much of my investment capital after the GFC, I didn't want to risk losing a big chunk of it if BEPPA went down the toilet.

Although content with my modest profit overall, like many others, I am now kicking myself having sold 500K BEPPA's at around 10 cents instead of holding on.

I was very influenced by this statement in the refinancing announcement: The value outcomes of the transaction for BBI ordinary security holders, EPS holders and SPARCS holders are not certain and may attribute a value to those securities that is less than face value or recent trading prices.. I was in Bali when the announcement was made and I think BEPPAs were around 15 cents then. When I got back and was able to digest the announcement, BEPPAs were about 10 cents and that was when I liquidated my holding. It was the possibility of BEPPA following the refinancing being worth less than "recent trading prices" that I found too risky to keep holding.

If BBI had worded that statement to better reflect the deal, then I probably would have held on. Knowing what we know now, I think it should have been worded as follows: The value outcomes of the transaction are not certain and for BBI ordinary security holders may attribute a value to those securities that is less than recent trading prices, and for EPS holders and SPARCS holders may attribute a value to those securities that is less than face value. Indicating that BEPPA could be worth less than its $1 face value is quite different to indicating it could be worth less than its recent trading prices, which was as low as 8 cents.

Whether the ambiguity was intentionally made to loosen up some BEPPAs for insiders to buy is something we will never know.