Hi all happy sharechatters,   .... oh alright..... grumpy chatters too  .
Dorchester Pacific shareholders got bonus issue warrants
(ex19th Sept) 1:4 DPCWA and 1:4 DPCWB.
On the other channel some
writers consensus were, that once the warrants were issued
the head share DPC would fall back in price. This has not
happened ,as yet. The demand for scarce stock I suspect is
keeping the price up.
I was particularly interested in
the price paid for DPCWA 35cents and DPCWB at 40cents, albeit at
bugger all volume. I assume there are no warrants
trading on the market as the buy bid is 36c and sell bid is
35c, this pricing is illogical hence the assumption.
If you do the sums many other things on the surface,seem at
first, beyond belief. DPC last traded
today @ $2.03 ( ex), for mathematical purposes say $2
(ex warrants).
By Sept 2006 there will be another 10 million ( 5m Sept
2005 + 5m Sept 2006) to add to the 20million shares on
issue, so effectively with both warrants all successfully
converted @ $1.70, in theory at present day price the DPC
share is worth $2.55 (if the warrants are worth zero).
However the market is seeing this differently at
present with the warrants worth around say 35c.......35c +
$1.70 = $2.05 is what (an) investor (s) is seeing at
present. If this becomes reality, this values DPC at
present day price at $3.07.
So if any investor buys these warrants for say 35c
now. The present day price (before dilution) has to be $3.07 +
interest earned if money in the bank say 4% 1.4c x 2 years(or
3) = $3.10. This is the price DPC ( undiluted of 2005
Warrants) has to be in Sept 2006 for that investor to break
even.
The burning question is ...is DPC going to be worth that
amount considering that the market only valued the stock at a $1
last year. Answer ...don't know.
The facts .......DPC being a small stock usually gets
forgotten, hence $1 around 2001-2002 when it should had
been $1.60 at least. At present It has lost its forgotten
status.The recent price surge from $1.40 - $2.18 and back
to $2.03 is demand driven. What factor (or factors) is causing
the demand?
Factor 1 ...Investors waking up to a hugely
undervalued stock in short supply.
Factor 2....Bonus issue of the warrants.
Factor 3....Selling its pet poodle, Sterling
Portfolio Management Ltd to Spices (a wholly owned
subsidiary of AXA).
I have a feeling Factor 3 is not a key driver in this
momentum, BUT, it will have the biggest impact fundamentally as
Sterling sucked about $2M/annum. I will therefore estimated that
the 1/2 year result for DPC expected to be released in mid Nov
2003 will be $1.7m + the extra saving from sterling of $1m =
$2.6m ( 2002 ..$1.462m) an increase of 78%.
DPC management usually has a 40% dividend
payout policy. So, with status quo, I
estimate, $2.6M /20M shares X 40% = Dividend of
5.2cents (2002..3.6cents).
Therefore, on my estimated 10cents per year
dividend payout on a growth share... $3 a share is not
beyond belief, and this is after Nov 2003, less alone at
Sept 2005 or Sept 2006.
DPC has had a remarkable growth period during the
last 6 years within the financial sector, and with the
possible extra money it will receive with the warrant
conversion ( $17millon),with great management, the future
for DPC is looking very rosy.
 oop Disc: own DPC, DPCWA, DPCWB | 
See IRG research reports
. I have no knowledge
of how underwriting works, and I must confess that I hadn't looked at
the angle of 42 Below being a total flop, partial flop ..yes.
oop