My thoughts... Ok, since I have been reading this board for a while and recently (though not recently enough…..LoL) started throwing some spec money into YLO shares, I thought I'd share my view. At these levels, I think the preferred, and possibly the commons offer a great risk/reward trade. This Co is far from CCAA. Even then, breaking up the Co, makes no sense there are no hard assets, the Co is worth way more whole than apart. Much more lileky is recapitalization under CBCA
The current low trading levels have been in part a simple matter of more sellers than buyers. There is allot of stock out there to be dumped. I’m sure many market sell orders have been given with little thought, “just get that s**t out of my account”, and there just aren’t many investors out there with a reason or stomach for buying it
Yes, YLO’s business model has issues, but it always has, and now just about all possible bad news is out and has been priced in. One needs to review what fundamentally has changed for this business in the last year, and the recent drop in share prices is not fully warranted (though it was way overvalued for years, propped up by the high dividends).
The common shares and preferred will not be worthless after a recapitalization, the holders will need to be thrown a bone in the recapitalization process so they will vote in favor.
I foresee the recapitalization as something like: The bondholders get new debt at a 50ish% of face, with some common shares or warrants thrown in for a kicker, Pref A & B get converted to commons & Pref C&D get new prefferreds at 10-20% of face, or some sort of conversion to commons. The commons would get heavily diluted no matter what, but the new capital structure would ramp up their value, inclining the majority of common holders to vote yes. That capital structure should work for a sustained business model for the current business, even if print revenues continue to decline at the current rate (and that should start to level out eventually). Though I think to make this all happen a shake-up of management would be needed to instill confidence in the go forward business.