Forum Archive Index - December 2000

["Grant Keymer" <grant@jenlogix.co.nz>]

Gerry,

 

You make some extremely valid points.

Maybe you're right -- FFS share price will plunge post-rights.

It certainly happened with Air NZ, although you have to agree the lowest point was only 6.7% (AIRVA at 140c) below the rights issue price of 150c.  Some of that difference has been recovered already (AIRVA = 143c today).

And chances are that a recovery to 150c won't be too far away.

 

But there is one fundamental difference between FFS Rights Issue and AIR NZ:

 

==> All the bad news was on the table prior to the rights issue commencing.

 

OK, CITIC have done their best to stuff things up during the rights trading period, but who knows, they may have been doing some of the buying...

 

I don't see what yet-to-be-disclosed factors there are which could make FFS price fall further.

A rights issue nearly always depresses the price of a share, and once we are clear of the impact of that (say Jan/Feb), there should be good scope for recovery.

 

We'll see who is right on Monday I guess...

 

Cheers

 

Grant Keymer
____________