Forum Archive Index - October 2000

[Brian Gale <brigale@i4free.co.nz>]

Great Post Mike.  Loved the last part.

Regards
Brian G

At 14:25 13-10-00 +1300, you wrote:
>An anonymous poster wrote
>
>"Imho,Fletchers announced the sale before the commission announced their
>decision because they were trying to put pressure on the commission
>.As a 3rd generation New Zealander, I am glad the commission decided against
>a monopoly
>  I am sure that some of the Fletcher management have been involved in
>insider trading. Their trading for the last month should be investigated,
>and they should be held accountable
>is it a full moon as well?"
>
>I certainly could not be considered an apologist for the Fletcher management
>but I could almost guarantee that has been no insider trading. They have
>always been paranoid about monitoring senior executives share transactions
>and there are periods, prior to the release of results for example, when
>there is an embargo on dealings. I am sure that the whole period of the
>restructuring would be covered by the embargo. When a certain level of
>seniority has been reached all share trades have to be reported to the
>Board, witness Mr Hoggard's slip up: he broke the rules and paid the price.
>
>  I subscribe to the cock up theory of history rather than the conspiracy
>theory. The price of FFS dived steeply on I think is was Monday suggesting
>that maybe somebody had got wind of the rights issue. If the leak had been
>about the whole deal it follows that FEG would have jumped up at the same
>time but it didn't suggesting that if there was a leak it came from someone
>who knew about the FFS deal but not the FEG - not likely IMO. I think that
>the original plan was to release the details of the reorganisation today
>after the Commerce Commission approval but that the activity in FFS shares
>spooked the board into an early announcement. What they didn't count on was
>the decision from the Commission, hence the cock up.
>
>I agree with Malcolm and the anonymous person. I am quite happy for FEG to
>continue as a stand alone company, it has first class assets, good
>management strong cashflows and oil is a very good business to be in at the
>moment. I did intend to sell today (I was contemplating selling on Wednesday
>but my broker thought I would get a bit more after the Commerce Commission
>approval - Greed!) because the deal having being struck and the opportunity
>to continue to participate the future growth had effectively gone. So I will
>hold on and not worry too much about it
>
>What I can't understand is the psyche of some investors. We know that Shell
>who are no mugs when it comes valuing  oil and gas assets are prepared to
>pay $8.40 a share. Ok so there may be some synergies which Shell can extract
>which may make FEG worth more to them than anybody else so lets cut that
>down to $7.50  We know that there is some value in Capstone and Rubicon,
>$2.92 according to FCL but lets say $1.50 to be on the safe side. The other
>factor is the underwriting risk for the FFS issue but that should not be too
>great. A conservative valuation therefore should be $7.50 plus $1.50
>totalling $9.00.
>
>Why then would someone dump 22,000 shares at $7.52 when the market opened
>this morning? Beats me but I guess that it is  the irrationality of the
>market that makes it so interesting
>
>Talking about the moon, the walking group that I belong spent the first 15
>minutes this morning moaning about the thousands of dollars we had each lost
>on the markets in the last couple of weeks, the state of the economy, the
>falling dollar, the Treaty, the District Plan and everything else that is
>wrong with the world. Then we reached the top of the hill at dawn and looked
>out over Tasman Bay, The moon was huge and full and hanging over snow capped
>mountains which were illuminated by the early rays of the eastern sun. The
>air was still, the sea was calm and the dawn chorus was in full voice.
>Magic. There are more things in life than stock markets.
>
>Cheers
>Mike H
>
>
>
>
>
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