Forum Archive Index - May 2002

["Malcolm Cameron" <malharcameron@hotmail.com>]

Matthew if you can get into a library that has copies of the weekend edition 
of the Australian Financial review for the period you will have a very 
different insight into the Air NZ debacle
Malcolm


>From: "Matthew Van Veen" <mattvanveen@hotmail.com>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: Re: [sharechat] Air NZ Chart
>Date: Thu, 16 May 2002 10:42:24 +1200
>
>Snoopy
>
>I have decided to reeducate myself and am currently a "mature student" 
>doing
>a DIP BUS at AUT. One of my papers is Business Finance and a question in my
>current assignments is "Describe and explain the factors that caused Air 
>New
>Zealands financial crisis in 2001".
>Its due in next week. I put info together from the AIR website, treasury,
>news clippings and sharechat archives. I will use the Chart that Phaedrus
>kindly produced for me as an attachment with a basic explanation that you
>have highlighted. The other recent rights issues were in Oct 96 and Oct
>2000. Note though the price was long trending down prior since 1999 prior 
>to
>the purchase of the 2nd 50%. I still however can't measurably pin the blame
>on one thing as there were various factors all beginning with the Aust Govt
>and of perhaps the conflict of interest on the Air NZ board?
>
>I think the story of Air NZ will be a case study for all NZ business
>students for years to come as like ENRON possibly will be in US.
>
>Feel free to offer more opinions - all will be a help. The question only 
>has
>a 1500 word limit.
>
>Matt
>>From: "tennyson@caverock.net.nz" <tennyson@caverock.net.nz>
>>Reply-To: sharechat@sharechat.co.nz
>>To: sharechat@sharechat.co.nz
>>Subject: Re: [sharechat] Air NZ Chart
>>Date: Wed, 15 May 2002 19:33:22 +0000
>>
>>Hi Matt,
>>
>>It was interesting to see the Air New Zealand share price chart again
>>and we can thank Phaedrus for it.
>>
>>However, what do you intend to do with this chart?   I would suggest
>>that considering any of those share price figure plot points before
>>the capital reconstruction became inevitable late last year is not
>>wise.
>>
>>Now, I know that Phaedrus would say that the chart is only an
>>approximation, as it doesn't allow for dividends cash issues and
>>whatever else.   However, I would go much further than that.  So much
>>capital was introduced into Air New Zealand during the
>>government reconstruction that if you attempt to use the chart as
>>presented, not only is it inaccurate, it is *dangerously misleading*.
>>
>>Immediately before and immediately after the capital reconstruction
>>the underlying business did not change instantly.  However, instead
>>of the AIR shares listed on the stock exchange representing the
>>whole company, those same shares were only representing 18% of the
>>business.  To account for this, you have to scale down the figures
>>before this reconstruction time period accordingly.  What you must do
>>is take the closing share price before the reconstruction and scale
>>them by 18/100 or 0.18.   Take an example:  The share price closed at
>>$1.58 at the end of year 2000.   However, on your graph you will need
>>to use the figure $1.58 x 0.18 = 28c.   Only by doing this will you
>>be able to glean anything meaningful from this chart.
>>
>>SNOOPY
>>
>>
>>
>>---------------------------------
>>Message sent by Snoopy
>>e-mail  tennyson@caverock.net.nz
>>on Pegasus Mail version 2.55
>>----------------------------------
>>"You can tell me I'm wrong twice,
>>but that still only makes me wrong once."
>>
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>
>
>
>
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