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I'd
like to thank those commenting on this situation.
I'm a
novice investor holding FFS and I guess I'll take up the
rights
because I just HOPE something positive will happen in
2001. From what I can
ascertain, nobody really knows what is going to happen.
P.S.
Does anyone know of any fortune tellers??
regards Mick
Brian,
My entries of Nov. 12,13 and 14 may be
of some help.
I did put a value of appr. 60 cents/share (before
the cash issue).
This translates to 36.6 cents after the issue.
Others have put a valuation of 43 cents on the stock.
These valuations assume that the
partnership with the Chinese will continue, and
that 'lucky' RUBICON will take over the surplus rights.
Some investors do not make a distinction
between Valuation and Market price.
In commodity stocks the market
price - depending on the state of the cycle-can be at least 30% less
than the valuation!
Often, firms refuse to depreciate values: To
do so may cause a breach of loan covenants and/or decrease share
prices. Higher share prices tend to increase takeover
prices!
The- mentioned- 36.6 and 43 cents will
equate with market prices of 25.6(not a bad guess with rights @ 0.5
cents!) and 30.1 cents.
If the shareholders and
Rubicon carry on the business, then the share
price could stay at low levels. It could improve if the current dispute is settled and then
fall back somewhat, later, due to the sheer supply: Imitation of
Brierly?.
If
Weisenhauer or other parties make a bid, then
the bid price will be closer to a valuation made by
an independent and honest party.
If one is keen to get into a forestry stock,
then CAH at a discount of
some 40% to valuation, with high cash
reserves, could be a superior
investment!
And you will get a reasonable dividend as
well!
Mind you, after you look at the tarot cards and
judge that a takeover for FFS
is imminent, you may decide to take up the
rights!
It is a matter of making
comparisons and ferret out those investments which give a good income
over a longer term and which one can live with, I think.
Those are my opinions,
Gerry
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