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Stocks G / Golden State Bancorp, Inc.


Subject:  Re: Any opinions on valuation of GSBNZ? Date:  6/6/1998  8:09 AM
Author:  greyfuldad Number:  15 of 43

A prospectus was issued 5-22-98 regarding the GSB tracking warrants...GSBNZ. This should have been mailed to shareholders this past week, or call (818)500-2723 investor relations. In short, there are about 85 million LTW (Litigation Tracking Warrants) issued or reserved.
GSB has won its case and it has been upheld by the US Supreme Court (by a vote of 7 to 2). The case has been remanded to the Claims Court for a determination of damages. GSB has presented three alternative damage theories ranging in amount from $900 million to $1.9 billion. The Government denies that the bank has suffered any compensable damages. A decision is anticipated during the December1998 quarter.
If the amount recovered is $250 million, each LTW would be worth $2.91. If $500 million is recovered, each LTW is worth $5.83. If $1 billion is recovered, each LTW is worth $11.66. If $1.5 billion is recovered, each warrant is worth $17.49., etc.
As with any court case or damage award, there are appeal processes which could delay the payment of any monies. If nothing is actually recovered, the warrants are worthless.
So, the warrants could be worth anywhere from $0 to about $20.
This is a calculated, speculative risk. It is more of a gamble than an investment. You could double or triple your money, or end up with nothing...kinda like options.
Personally, I'm going to sell half and hold half. Part of me is a gambler, the other part hates to lose.
Hope this helps...good luck to you.
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