Forum Archive Index - June 2000

["John H T Wilkinson" <jhtw@clear.net.nz>]

Vincent,

 

BRY carries investments at valuation in its Financial Statements.

The 1999 Interim Report shows Thistle has risen from NZ$1,160M at 30.6.99 to NZ$1,285 at 31.12.99.

 

The Dominion shows:  at  30.06.99    Thistle 177½ p     BRY 53 ¢

                                 at  31.12.99    Thistle 187½ p     BRY 40 ¢

                                 at  25.05.00    Thistle 121 p        BRY 35 ¢

                                 at  31.05.00    Thistle 129 p        BRY 33 ¢

 

Dividing through gives a factor of 6,535.21 and 6,853.33, so it appears that the number of Thistle shares held may have increased. I doubt any more money was put in. Maybe bonus issue/s!, or maybe the above prices were not used.

 

If they sell at 170p, then, assuming number of shares remains unchanged between 31.12.99 and 30.06.00, a loss of approximately NZ$120M [(187½ - 170)*6,853.33] will be booked. So yes a substantial loss will be incurred, but not as much as I think you thought.

 

Between 30.06.99 and 31.12.99 the 10 p increase in Thistle was matched by a 13 ¢ drop in BRY.

Between 31.12.99 and 31.05.00 every 10 p drop in Thistle was matched by a 1.2 ¢ drop in BRY.

 

If Thistle sells at 170 p, then that is 41 p increase on the price at 31.05.00. The above analysis shows that the two shares are not correlated so you need to look for some other explanation.

 

The Market factors in all information as it goes along. I don't think it is the loss that will be recorded that is driving the price down. I think that the Market may perceive that it is a bad move to sell Thistle at this stage when it is showing signs of coming right. Someone's going to get a bargain at the Brierlys shareholders expense and if it's Directors are going to go along with that then what hope have the shareholders got in the long term, so get out now!!

 

 

 

----- Original Message -----

From: vincent.wang

To: sharechat

Sent: Thursday, 1 June 2000 20:27

Subject: [sharechat] BRY/Thistle

My broker told me the price BRY paid for Thistle is 200 p per share, if this is true, then BRY would incur substantial loss by selling it at 170 p.  I guess this is the reason why BRY's share price plummeted in the past few days. (every 10 p drop on Thistle would cause 1 cent drop on BRY share price)

 

RGDS,

 

Vincent Wang