Being a shareholder in Trans World Entertainment (NASDAQ: TWMC) hasn't been a lot of fun for the past decade or so. The company is the leader in mall-based music sales but, as you can imagine, iTunes and Wal-Mart (NYSE: WMT) have made that market position into a Pyrrhic victory.

Founder and CEO Robert Higgins withdrew his $5-per share takeover offer back in May, citing the poor credit market, and a $7-per share offer from a fund calling itself Sherwood Investments mysteriously evaporated. Now the stock is down in the $2.50 per share range and, with no going-private deals on the horizon, the company is making a last ditch effort to execute some kind of turnaround that might restore some modicum of shareholder value.

The company is in the process of rebranding all of its stores under the f.y.e. label, and is also embarking on an ambitious ad campaign featuring R&B star Ne-Yo and WWE star Batista in television commercials. The Business Review reports:

In one 30-second commercial, Batista and another WWE wrestler, MVP, drop-kick and body-slam each other in what seems like an impromptu fight inside an f.y.e. mall store. Bass-thumping rock music blares as fans cheer from outside the roll-down security gate.

In the other spot, teenage girls at an f.y.e. realize the chart-topping singer Ne-Yo is wearing headphones in the store, singing aloud to himself a cut from his yet-be-released album, "Year of the Gentleman."

Tuesday I wrote about Sherwood Investments' 13-D filing (the first in the firm's history) indicating a 5.48% stake in Trans World Entertainment (NASDAQ: TWMC), the owner of mall-based music and entertainment stores including f.y.e., Suncoast, and Sam Goody.

Obviously this lends a good deal of credibility to Sherwood's offer, but there are still a few things that investors need to wonder about.

The first, and most important question, is how many contingencies does the offer contain. If the offer is loaded with hedges and outs for Sherwood, it's a lot easier to dismiss it as blustering. If Sherwood's offer is contingent on the ability to secure financing and the Kansas City Royals winning the World Series, it's pretty easy to dismiss. How many contingencies does the offer have? It's hard to say because in the the 13-D filing, Sherwood actually contradicts itself:

On November 29, 2007, Sherwood sent a letter to the Issuer and the Special Committee, in which it made a preliminary proposal to acquire all of the Issuer's Common Stock not owned by Sherwood for $7.00 per share, subject to a due diligence review and complete and fair evaluation of the Issuer's business. A copy of that letter is attached hereto as Exhibit C.

Not too long ago I wondered about Sherwood Investments' $7 per share bid for Trans World Entertainment (NASDAQ: TWMC). I questioned whether Sherwood was serious about its offer, but added that Julian Benscher, the man who signed the company's press releases, told me by phone that the offer was serious.

After that post was published, Benscher called me back and explained that the reason he had not acquired 5% of the company and filed a 13-D yet was that Sherwood's securities lawyer is currently traveling.

In addition, he said that his reason for stating in the press release announcing the offer that Sherwood would possibly raise its offer was that in a prior PR on TWMC, he has said he believed the company's value was higher: "We are highly confident that an auction of the company would result in a sale in excess of $8 per share, a considerable premium to your current proposal."

I'll believe that Sherwood's $7 per share offer is serious when a deal is consummated. Goldman Sachs Group, Inc. (NYSE: GS) has been shopping the company for months, it's hard to imagine another bidder emerging with a higher offer.

But until then, I think investors should take Sherwood's offer with a bucket of salt.