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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.
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To: meck who wrote (25121)6/1/1997 11:47:00 AM
From: Kerry S. Nelson   of 28369
 
Hello:

I think you are absolutely correct. They basically won't get anything back. You can't get something when there is nothing there, which is basically the present situation in comparison with their wealth a few months ago. The other thing is that a lot of those stockholders sold their stock in order to take the loss on paper. Another bad move in my opinion. Now if BRE-X happens to be able to prove there was a fraud committed within the company and collect on the billion dollar insurance company, those stockholders that lost the most will not benefit. Is this a correct analysis of the situation? If they collect on the policy, the money will go directly to company itself and not the shareholders. Is this a correct analysis? Then the stock price will rise some, because BRE-X now has some more working capital to rebuild itself. Thus everyone who bought in at pennies will benefit from the policy. There will be those nasty little lawsuits, but by the time they actually get to court and all it will be years down the line. They will also have to prove a very difficult case. In all likelihood, they will be settled out of court years from now.

This is a summary of what I see happening. 1) They'll likely collect on the insurance and the stock price will rise. 2) Management will rebuild itself and get into new projects. 3) Current stockholders will benefit. 4) In a few years, lawsuits will be settled out of court with the stockholders getting back only a small portion of the money they lost. 5) BRE-X will rebuild and do well. This is due to the fact that they have the eye of the world on them now. Anything they do is big news. You can't BUY attention like that! 6) Everyone who bought in at pennies a share will be very well off in about another year when all this starts to blow over. Would you like another example where the lawsuits are just going to "go away?" It is on a much smaller scale, but could work just as well. In late February CTXS was having negotiation problems with Microsoft and their stock plummeted from $30 to $9 in a day. All the stockholders filed a lawsuit. CTXS continued on their merry way to finally reach an agreement with MSFT and have their stock rise back to $38. Now the lawsuits are basically null and void. I'm not saying that I think BRE-X will do the same thing in the same timescale. I think a similar type of thing will happen over the next few months and BRE-X will continue on its way. They aren't going to fold and disappear....so I'm not selling my shares. I'm here to wait out the worst of it and see what happens. I think a lot of people feel the same way who aren't the daytraders and that is why people are still buying this stock that appears on the outside to be "worthless."

This is just my opinion.

Cheerfully,
Kerry S. Nelson
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