casper wrote:
With the Lehman Brothers debacle, F1 shares are now worth $0.02. Lets just wait what happens to F1 next year. Maybe F1 will only end up with 5 teams - the car manufacturers.
How many shares are there in circulation? Where did you get this $0.02 valuation? F1 is not a "toxic asset" so it retains its pre Lehman crash values based upon cash return and revenues. If they are $0.02 each I want to but them, all of them. But that is it, CVC has said that they are the only "real buyer" since they have first refusal rights. If Lehman is holding a note that finances the CVC F1 deal then those parties are still obligated to the performance of that note. If Lehman had ten ounces of gold and Lehman goes broke, then the gold isn't suddenly worth pennies an ounce. It is "non-toxic" and retains its value. If Lehman want to sell the gold it can at market rates. If Lehman must now liquidate its CVC F1 funding notes for capital, there is a clause that CVC has the right of first refusal. But should CVC fail to put forth a good faith offer (no doubt contractually defined) then the liquidators for Lehman's holdings have the obligation to seek a better price on the open market. F1 is making a fair return on CVC's investment. CVC can seek another to float a new financing deal or they can put up their own capital. With the shares may or may not go the control of F1. That is in the contracts.
When you finance your home there are clauses requiring you to maintain insurance coverages, to keep the asset in good working order etc. The same can be supposed with the original financing that CVC obtained from Lehman. If CVC kept the asset (F1) in profitable shape and properly administered, then no control would revert to those who financed the deal. Therefore any sale of shares would only entitle the purchaser to their stake in the revenues and executive control would remain with CVC, who are happy to let Bernie run the show.
If the shares were floated at $0.02 there would be a rapid bidding war for them and they would escalate to a fair market price. Who knows, if CVC can't find a rival financier for them to buy back the shares Lehman is now forced to liquidate (as they have first refusal), then maybe some Arabs or even Honda and Toyota (both of whom had great $$$ years in a down market) might buy some equity interest in F1. Wouldn't that be ironic after the GPMA threat!
Its just like those ten ounces of gold. The asset retains its value based upon its performance fundamentals no matter if the holder of those notes has every other "toxic" asset he own turn to mud.
Innovation over refinement is the prefered path to performance. -- Get rid of the dopey regs in F1
