Forum Archive Index - April 2002

["Paul J. Brewer" <pjbrewer@ust.hk>]

The story is that the sub lost money at Milford Sound and there is
a backup plan to operate in the lake at Queenstown.

30 June 2001 Financials showed book value of assets was $3.15 million.
$2.2 million of this is the submarine itself, which they built for $1.5
million.

The market is valuing this company at $0.06 x 8.7 million shares = $0.52
million

Suppose the company were liquidated.  Suppose we value the sub itself at
zero.
Losses in Milford Sound were est at around $600k, so that leaves
$3.15-$2.2-$0.6 = $0.35million
or about $0.04/share, as a conservative lower bound.  The sub must be
worth _something_,
right?

Now having been down on the sub, I can say that the sub is pretty cool.

If it were run in Queenstown, it would be in a much higher traffic area
than in
a remote corner of Milford Sound.  The lake is stocked with trout, so I
suppose
there would be some amusement value in the dive (though the dive at
Milford Sound
was probably more interesting from a biological perspective).

The problems I see are these: (1) it gets cold at the lake in the winter
(does it freeze up?); (2) You can see the trout from the underwater gift
shop at the jet boat pier; (3) The jet boat is a better adrenalin rush
(the sub might be better for old people as long as they aren't
claustraphobic).

I suppose I should be buying a bit more rather than posting this;
eventually they will find a sensible
place to run the sub (why south? why not north? or someplace tropical in
australia or fiji?), or they will run out of money.  Which do you think
will happen first?




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