Forum Archive Index - May 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

> 
> Looks like a classic overreaction to me,  i will be
> buying more first thing
> in the morning,  i read the announcement when came home from work
> and expected to find the shareprice down by around 20,  but 50!!!
> We all knew V had got off to a bad start, but this season
> sounds more promising
> 
If my memory serves me correctly, 30 June 2001 (yep next month) is 
the first chance for those people who own the rest of the Frucor 
shares (49.9%?) of the company to sell down.

If the value of Frucor is between $1.95 and $2.25 with a 
propsectus forecast profit of $20.3million dollars for year 2001 it 
is clear that if the real profit is likely to be only $11m or so the 
value of Frucor shares should be rather less.  How much less?  How 
about a range of $1.05-$1.22?   That is what you get if you scale the 
share price to the reduction in profit.

Even if $1.70 is the 'correct' price there is no guarantee it will 
stay at that level in the near term.   FRU at $1.70 may seem low to 
you, but to the insiders selling out at $1.70  will mean big 
profits!   There is potential for more downside in the share price if 
this happens.  Be careful. SNOOPY

(disc:  Do not own Frucor.  After reading the overhyped profit 
projections in the prospectus, plus the looming cloud of the 
management sell-down, decided not to invest, quite yet!)







 
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