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| From: | "Wedde, John" <john.wedde@cit.ac.nz> |
| Date: | Wed, 8 Nov 2000 09:33:17 +1300 |
Hi Gerry,
No, I don't think you are being naïve. As an openly confessed ITC fan I
must say it was increasingly irritating as the share price dropped as each
load of options was converted in recent weeks. Unfortunately today I'm away
from home base and do not have access to my files so much of what I'm about
to say is off the top if my head stuff --- nevertheless I'm confident about
its accuracy.
Firstly the recently converted options were at 17.5 cents. ITC traded at
under 25 cents during much of the time these were being converted. Sure
there is a discount here, perhaps as much as 40% in some cases, but
sometimes as little as 14% and we shouldn't forget that options have much
more risk attached to them than the head share. Don't forget, if options
are "out of the money" then of course thy become totally worthless.
Secondly, the options recently converted amounted to a dilution of about 10%
of shareholders funds. This is hardly a huge amount and it is worth noting
also that the share price dropped by a far larger amount over the time when
these were being converted. I found this hard to understand especially as
all the news on ITC was very positive over this period.
David Seton, I believe, was a director of Iddison, the shell company that
ITC backed into. It would be reasonable to assume that the cheap shares he
received were part of the consideration agreed to at the time of the
consolidation of the two companies.
I suspect also that the whole idea of options is very "American' and their
use these days to reward people is far greater than in previous times.
Perhaps in NZ we havn't quite got to the point were we accept and understand
them as they do in the States.
Nevertheless when I return to my office and have access to my filing cabinet
I will review all my information relating to ITC options.
Still committed ITC fan but watching closely,
John
-----Original Message-----
From: Gerry Tyler-Smith
[mailto:g.tylersmith@ext.canterbury.ac.nz]
Sent: Tuesday, 7 November 2000 16:52
To: sharechat@sharechat.co.nz
Subject: RE: [sharechat] ITC's directors' share
dealings
Am I being naive in wondering about the massive amount of
very cheap
options granted to the directors during the year .. also the
transfer of
180 000 Virtual Spectator shares, at cost, to Snider Capital
.. also the
issuing of 3 million ordinary shares at a price of 25 cents
(when they were
trading between 80 to 93 cents) to Huia Trust (coy in which
David Seton,
another director had an interest) ... All this siphoning off
of shares into
private companies, as well as milking the option cow for all
she's worth,
makes me very uneasy about the motive of these boys .. . or
am I
misunderstadning what is, in fact, the right and proper way
of starting up
a company? it's possible, too, that I am misreading what
is, to me, rather
complicated finanical information in their annual report
>Hi Warner,
>Sorry I've taken a while to respond to your post.
>
>BDO: I exited out of this today at 14.5 cents, having
purchased a couple
>of months back at 10cents. I'd really intended them as a
long term hold but
>decided to follow one of my favourite old guidelines,
"nobody ever went
>broke taking a profit". I'm still none the wiser as to why
they rose the way
>they did [50% in a week]. It will be interesting if good
news does emerge in
>the next day or so!! I'm still a great believer in
Business to Consumer
>ECommerce. It will have its day. No doubt
>there will be some casualities along the way. I may buy
back into BDO on any
>price weakness.
>
>ITC: Steven Tindill's family coy and ITC have now both
increased their
>holdings in DVI to 41.8% each. CIBC's equity research paper
on ITC published
>back in August estimated their asset backing to be around
25cents. I would
>concur with this. The following on the Chinese venture is
quoted direct
>from CIBC's paper: "ITC was recently awarded an 8 year
contract to manage a
>US$20 million venture capital firm that is focussed on the
Chinese IT
>market. Under the terms of the agreement ITC will receive a
3% fee [US$0.6
>million pa] in addition to a 20% cut of all future profits
generated by the
>fund."
>In my very humble opinion ITC are presently severely
undervalued by the
>market. The sale of Exonet was a superb result and should,
rationally, have
>seen the share price take a good leap upwards. Of course
the share market is
>not necessarily a rational place and the price tumbled from
that time.
>You may be able to get a copy of CIBC's report from their
website,
>http://www.cibcwm.com.au <http://www.cibcwm.com.au>
>ITC's own website also keeps interested parties well
informed,
>http://itcapital.net <http://itcapital.net>
>Disc. I hold ITC.
>
>Cheers
>John
>
> -----Original Message-----
> From: Warner Lamb
[mailto:cloud9@i4free.co.nz]
> Sent: Thursday, 2 November 2000 17:14
> To: sharechat@sharechat.co.nz
> Subject: Re: [sharechat] penny
dreadfuls
>
> John, by the look of replies, theres not
much interest
>anymore. These are
> just my personal opinions.
> BDO..The last dotbomb to go under was an
online beauty
>retailer....Since it
> was issued at 25c, it will have alot of keen
sellers with
>any upward
> movement.
> NGL.. no real reason today for improvement.
Could have been
>one player
> having a go. End of day there were 7 trades
for $6K..not to
>breathtaking.
> This is in a similar situation to BDO but
worse coming off a
>high of 70c.
> Breakeven now out to end of 2001, not 2000
from my
>understanding. Wont see
> any of my $$
> ITC.. I think has the most prospects (I have
never owed but
>am considering a
> punt around 20c). The 3D screen must have
the biggest chance
>of payoff dont
> you think?. I have been reading some
articles about "head
>and shoulder
> charts" and ITC, EFC, ADV and the rest seem
to all be back
>to mid 99 levels
> before any of the hype gathered momentum. Im
not sure what
>is supposed to
> happen to these stocks technically but you
would think they
>are in oversold
> territory. One concern for ITC is the small
stakes they hold
>in most
> companies (40% in DVI the largest) apart
from 100% of
>Terabyte that is. They
> still did well with exo net with only 35%
but makes you
>wonder what
> influence they have with only 18% of VS and
25% of Golden
>Orb.
> Can you tell me more about Chinese co
alliance. I hear that
>it covers some
> expenses? Also assets and cash from what Ive
read are now
>worth more than
> shareprice....Can you confirm that.
>
> Thanks
> Warner
>
>
>
>
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