For those of of you who have been following my stock picks, I wrote up CALC awhile ago.

Tomorrow the stock is getting delisted, but this could create a tremendous buying opportunity in the stock.

CALC is currently in bankruptcy, but in reading the plan to emerge from bankruptcy, it appears as if creditors will not take an equity stake in CALC, but will simply extend maturities of the debt and ask for a higher interest rate. In other words, equity holders will retain their current ownership in CALC. Given that the tangible book value of CALC is significantly higher than the current stock price, it would seem that CALC offers exceptional upside, should the bankruptcy court approve the current plan. A failure to approve the bankruptcy plan, is of course the big risk for CALC at this point. The court should provide a decision soon, though.

Importantly, my confidence regarding a favorable outcome for CALC in bankruptcy proceedings is strengthened by the fact that the largest shareholder of CALC, Hovde, is also one of the largest holders of the company’s debt. So it seems reasonable to expect that Hovde will push forward and support a bankruptcy plan which will retain significant value for shareholders.

At the same time, institutional investors who I’ve spoken with remain convinced that CALC’s current bankruptcy plan will pass and that the equity will retain significant value. I guess we’ll see…It will pay to keep a close eye on PR released by the company regarding the bankruptcy proceedings. Since few analysts cover the stock there will likely be plenty of time to build a nice position in the stock, once news of a final plan is released.

Disclosure: Affiliates of Envoy Global Research, and its principals, own shares in CALC. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.