"There's effectively nothing to lose and a hell of a lot to gain...

"There's effectively nothing to lose and a hell of a lot to gain compared to dilution."

That's how I feel about it now as well boof, now that a recap proposal is on the table. For BBI to rebuff the Bumblebee proposal today, it makes the first proposal (however unplatable as it may be) look more likely.

here is some crude maths. I may be way off in the figures, but it shows you how little you need to risk to make some good returns.

Let us say you had $200K to invest right now.

If you were to buy 100,000 prefs at 11 cents, then you only stand to lose what you put in, ie A$11K.

If you get fully converted to ords at current market prices as they are entitled to do in the BEPPA trust deed (and they look best advised not to get into a voting situation with Lowy and co who will vote anything down for the sake of it). At a ratio of 20:1 you get 2M ords. These ords probably won't trade at the VWAP price of 5 cents. I think they will trade more like 3 cents pre-issue.

If they then bring the rights issue over the top of the ords holders (including the new prefs and SPARCS holders now holding ords) at say 5:1 at (say) 2 cents (or whatever ratio they need), then you need 10M at 2 cents to take these up, ie $200K.

At this point the risk from the company failing is mostly taken away as the entire rights issue is underwritten by the CI and therefore guarantees BBi survives, so to commit $200K atb this point is not risky im my view.

Therefore you end up with 12M shares costing you $11K + $200K = .018 cents a share.

Given that the rights issue at 2 cents will undoubtedly be pitched at below diluted NAV (the CI will ensure this), then I would expect these shares to be trading between 2-3 cents post issue.

At 2 cents you make .2 cents profit x 12M = $24K = 11% gain.

2.25 cents = $54K = 25% gain
2.5 = $84K = 40% gain
2.75 = $120K = 57% gain
3.0 = $144K = 68% gain.

Just some figures.

The big risk of course is the company fails altogether. I have this at about 70/30 in favour of survival at present.