+15 already today
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+15 already today
Perhaps I should have put a winky face on that last post of mine. Better to judge people by what they do rather than what they say Phaedrus. You will note that I said that I *wasn't* buying those PGW shares at the bottom.
To my regret? No. It is always easy to look good 'after the event' when you trade the historical rising trend. But if those third party financiers had not come to the party we could have been looking at another Nuplex here. Next time you went down to the Auckland waterfront, you might have been throwing Craig Norgate a few coins to polish your boots Phaedrus!
The price of PGW shares has been moving about so much you may have to rewrite those moving average rules Phaedrus. When the market price moves around between 60c and nearly five times that amount ($2.90) in just a few months and the share price is now sitting in the middle of that range, you know that something extraordinary is going on.Quote:
I, too, feel sorry for those that sold at the bottom, but these were most certainly NOT people who believe that "the market is always right". Those that respect and listen to the market would have sold out at around $2.70 when the market began downgrading PGW last September. Even those using the usual "super conservative" 200 day moving average would have been out at around $2.30.
That extraordinary thing is not explained by the waxing and waning of dairy prices or the euphoria of the restructuring of the meat industry after all those years which ultimately ended up going down the Silver Fern Farms plughole. No, it was largely to do with the level of company debt and whether the big funders would cut PGW the slack to survive on its existing equity base.
If PGW had announced a 2:1 rights issue at say 40c, what would that have done to the historical charts? Effectively it would have flattened them out meaning that the ups and downs that we had seen were not as extreme. It would also greatly affect the historical 200 day moving average calculation. Since the capital raising didn't happen, all of that is *now* moot speculation. However just last month, a capital raising was a distinct possibility and the market was pricing in that real risk.
Sorry I disagree Phaedrus. I have ignored almost every market sell signal with PGW, and especially all of the recent volatility. As of this morning, I am back in the black on my capital account - so no big losses. Of course I have also harvested many generous dividends along the way. My success has been largely due to selling to Craig Norgate when he first bought into the company (off market) and buying back as the share price fell back in 2004 in the subsequent downtrend. Selling into the off market offer was easy. But my secret was the subsequent buying back in at bargain prices, not the selling.Quote:
Snoopy, buying well is nowhere near as important as selling well. Big money was made by those selling PGW at $2.70 - and big losses have been made by those that ignored the market and hung on. If nothing else, the sellers now have that much more money with which to buy back in to PGW if they so desire.
Of course this was five years ago now, showing that in *this* market as a largely passive investor, you need to be in for the long haul to show positive results.
As for those hypothetical cash holders buying into PGW if they so desire, the liquidity in PGW is not fantastic. The price moved up 15% on less than 20,000 shares this morning. And that was over six transactions averaging just over $3,000 each - all minimum economic parcels. Outside of the top ten, saying you can buy in at the price you want on a particular day and actually doing so is quite another matter.
SNOOPY
Who's buying up $2,760,001 turnover at 10am
To me the more interesting question is why would directors be selling (sold 2.3 mill shares via RPI today)
When I read their recent profit announcement, did I imagine that there was a spiel about the major shareholders being committed to PGW, and not intending to sell in current market ???
BFischer is right I think about RPI needing to realise some cash to pay the interest on maturing debt.
The more fascinating question is who has bought the 2.3 million shares and will the party continue to buy more?
Remember PGW is lining up an underwriter (s) to buy bonus shares in future.
You were dead right Kura. On 26th February we got:
"PGW's major shareholders remain committed to PGW. Rural Portfolio Investments (RPI) has advised that it is well advanced on refinancing its redeemable preference shares that are due in April and Pyne Gould Corporation (PGC) has confirmed that it has no intention to be selling in the current market."
Now on 26th March we get
"15. Number of securities held prior, set out by class and type (as required
by regulation 8) 86,797,343
16. Number of securities subject to acquisition or disposal (as required by
regulation 11(1)(b)) 2,300,000
F. Extent of relevant interest
17. Number of securities held now, set out by class and type (as required by
regulation 6B or regulation 8) 84,497,343 ordinary shares"
What you have missed Kura is that it is now *a whole month later*. Thus we have a 'whole new market'! The situation is exactly akin to if you were an employee of PGG Wrightson. If your boss came out and said he was 100% committed to your continuing employment, that would mean your employment contract was cast in stone for 30 days, absolutely guaranteed. It is agreements such as these which show the firm commitment of management for the corporate security of all stakeholders in this difficult environment, employees and shareholders alike.
SNOOPY
discl: hold PGW
The original preference share issue was $85m, underwritten by ABN AMRO Rothschild. Half of that went into the April 2009 maturing issue. The interest rate was 10.5% paid semi annually. That means an interest payment due of:
[($85m/2) x 0.105]/2= $2.23m
Proceeds from todays share sale (before brokerage) was :
(86,797,343-84,497,343)x $1.20= $2.76m
McConnen and Norgate have done what any responsible adult would do when there are hungry mouths to feed but no food on the table. They have sold some family silver at $1.20 a piece.
And what is more compared to the:
$1.56 x 0.87= $1.35
that RPI paid for the WRI shares in 2004, the share sale has occurred at a minimal discount. No pressure then! But of course RPI didn't sell those 'average' shares. They only sold the bonus shares issued at no cost when Wrightsons and PGG came together to form PGW. So actually RPI have made a good profit on the deal! Right? :-)
SNOOPY
PGW’s Chief Financial Officer to Resign
PGG Wrightson Limited [PGW] announced today that its Chief Financial Officer, Mike Sang, had decided to resign. Mr Sang is planning to take a break from work before pursuing new career opportunities. He has agreed that his resignation will be effective after he has seen the company through the completion of the financial year and its 2010 budgeting process.
PGW has commenced a search for his replacement.
PGW Managing Director, Tim Miles said, “Mike has played a critical role since he joined Wrightson as CFO in December 2003. Since the merger, he has overseen tremendous growth in revenue and profit across the company.”
“Mike has worked very hard to ensure our financial base is sound and he will be leaving PGW in good stead as a result of his endeavours. In particular, he played a key role in the recent successful renegotiation of PGW’s banking facilities in extraordinary times,” said Mr Miles.
“Mike leaves with our best wishes for the future and our thanks for the contribution he made during his time with PGW.”
A CFO leaving a company with financial difficulties. Never seen that before!