Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: Mad2 who wrote (17520)	2/23/2003 4:45:37 PM
From: RockyBalboa	of 18998

Hi, Mad, HVB and Commerzbank are really at high risk, none of possible suitors touches especially coba with a 10-ft pole right now. Auditors, in concert with regulators are stretching the rules quite a bit to allow coba to show a positive equity on balance. This year, an ominous item called other earnings reduced the annual loss by some 70%, but they still posted a loss of nearly 60c/shr. In reality (well, if there was a mark-to market) much of the book should be written off and several banks and insurances would be in violation of their regulatory capital requirements. The market puts already a very low valuation on their equity. The book value (not counting reserves and additional regulatory capital) is at about 21/shr (40 including regulatory capital) but the stock trades at 6. Their ratings have been downgraded each year since 1999 (from AA to A) and that have been years where it showed earnings of 1.1 and 1.8/shr . Its much like japan where banks were allowed to carry non performing loans at face value for more than a decade now.

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