FTL- Fruit of the Loom Message Board

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Non-Tech : FTL- Fruit of the Loom

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To: Feraldo who wrote (47)	12/29/1999 6:33:00 PM
From: Clement	Read Replies (1) of 161

Feraldo, Congratulations on your initial ANF call -- I think long term you're still wrong by the way, but I bought in after their IR debacle -- so I'm happy. As to Fruit of the Loom, your forecast of $20 is highly unlikely based on the fundamentals. You've completely misinterpreted the effect of the DIP and what happens during a bankruptcy proceeding. Shareholders will get pennies on the dollar if anything at all. Have a look at their latest balance sheet: edgarscan.pwcglobal.com They're even in a capital deficiency, and then tack on the debt of the Bank of America "bail out" -- which will not help current shareholders any; it means that FTL may still survive after restructuring, but current shareholders could still see absolutely nothing. One large asset that doesn't show up on the balance sheet is the value of the brand names -- but given the current financial situation, the debtors and preferred shareholders are in the driver's seat. As to whether or not the brand names could be sold for 83M (its current market cap), I find it highly unlikely -- so I would suggest that at $1.25 FTM is very much overvalued. I'm not short by the way (since accountants tend not to like unlimited liability), but I do hold a competing company Gildan Activewear (GIL) which fell today I'm guessing in sympathy since they are doing extremely well financially (and would fit quite nicely in your investment style). Clement

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