Originally Posted by deelmakur
They would also like the new company to buy back the convertible warrrants the government have. These can be converted to common stock, which would dilute other holders.
yes, in HP's case they got warrants for roughly 1/3 of the pre-merger, post-dilution equity. that's about 10% of the combined firm. tack on the 8% PBGC is sitting on via the old US Airways, and taxpayers own about a sixth of the merged firm equity on a fully diluted basis. that's too many eggs in a basket predicting "substantial losses" for at least the next year.