interesting case. A few thoughts:
1) I worked out the true free float (excluding insiders, and Royce funds, and treasury shares) is 16.4m shares so US$2.6m! Talk about microcap for retail punters?
2) upside is not great at all: 50%ish ! that is very poor for such an illiquid, dicey and complex situation. Current BV excluding award in GBP=0.26, last price 0.15 so last p/bv=0.58. that is totally fair for such a small Carribbean bank. Now assume award is fully paid, new bv (assuming no tax) will be 0.41. Should discount to book stay equal, price target is 0.23 : that is only a 57% upside whereas stock was trading at 0.08 a few days ago...
: recap +8 upside /-7 downside..... absence of positive convexity, sorry I pass!
3) you view the Government of Belize's arguments to the U.S. Supreme Court as "weak at best". Could you please elaborate? reading : www.law360.com/articles/823464/after-dc-circ-loss-belize-wants-justices-to-kill-25m-awards, one learns that:
(i) the questions presented in the cases mirror those raised in a case the Supreme Court had accepted earlier this year, Belize v Belize Social Development Ltd. So your assumption of 99% dismissal probability at Supreme Court sounds very optimistic?
(ii) "the BCB holdings award came from a secret, illegal tax deal that Belize top court, the Carribean court of justice, has already rejected"....
is the moral high ground for Belize?
(iii) "enforcement of the award in the US would have serious consequences not only for Belize but would be an attack on the rule of law for young democracies in the Carribean... and an attack of Carribean Court of Justice credibility, with potentially damaging consequences to United States interests in the region....the suits raised questions about how the US ought to weigh its policy in favour of arbitration and about the US governementt opposition to corruption"
Please comment