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Author: greyfuldad Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 43  
Subject: Re: Any opinions on valuation of GSBNZ? Date: 6/9/1998 5:44 AM
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Hey JJinLA, my personal assessment of the damage award is that it WILL happen, but maybe not until late 1999. My calculated quess is that the government will vigorously appeal any decision. The reason is that there are 30+ other financial institutions with similar claims. It could cost the government $20 billion to settle them all. GSB is farther along than anybody, but if this is settled, then it sets an easy precedant for the others waiting in the wings.

Without anything more than a quess, I figure the damages will be in the middle, with $1 billion being the net award (only an educated guess). That would still make the warrants worth $11.66. The final decision will be political as much as anything else. Will the government be willing to pay $20billion to the S&L industry after the billions they paid in the bailout of 8 years ago? Then again, 1999 and 2000 are election years. Will the politicians pay heed to the taxpayers/voters and oppose this, or will they double-talk, blame it on the courts and accept contributions from the banking lobbies? My guess...take the money and run. After all, the institutions with the suits are the strong ones who survived the S&L debacle.

Any other viewpoints are welcome. I feel the warrants will eventually pay off, but (like the stock market) will climb a wall of worry to get there. The price of the warrants will probably drift downward, then shoot up on any positive news from the courts. Who knows, maybe I'll increase my positions if the price is right.

As for the underlying stock, I figure GSB is still a long term hold. The merger with 1st Nationwide will go through in August, and that puts Ron Perelman in control. Say what you will, but that man knows how to add shareholder value. Especially if he's one of the major shareholders. Hang on to your hat, it's gonna be a wild ride.
Let's keep this thread going...anyone else out there?
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