Thursday CIT comes out with their plan to restructure. I was just researching this to get some clarity on what may happen on thursday and then on. First option is they declare bankruptcy, worst case scenario the preferred drops to half its value.. and strangely I'm okay with that.

I'm okay with it because there are a couple of other things more likely to happen. CIT avoids bankruptcy, restructures and rebuilding starts. Preferred shares (which I have recommended) begin to raise in value because the longs know that the preferred shares are due to be tendered at $25 a share late 2010 not to mention the dividends. (about $1 a share)

Another scenario is CIT reduces the number of preferred shares (debt) by offering common shares at a 5:1 ratio. Commons are at around $2 right now, preferred A was around $4 for me, I'm only holding 1000 shares but a deal like this basically doubles what I own right now.

Its a good play and I've actually learned a lot by researching it, if things go well it would end this week very far into the green. Then its back to BIEL to push my position over 100k shares and wait.