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Non-Tech : Is Terra Nitrogen Co. L.P. a good buy? (TNH)
TNH 83.960.0%Apr 2 5:00 PM EST
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To: Tom from BC who wrote (61)9/28/1997 10:25:00 AM
From: men mailman   of 91
 
First I want to point out that shareholders in TNH have a protection
against any move by tra, and are much better off than in most cases
of similar possibilities. The reasons are many, and I will point out
several.

1) The shareholders right of the highest price in 90 days if tra has
been buying, or the highest price in 20 days if tra has not been
buying is a great protection in the hands of the shareholders.

Since, if they see that tra has acquired 75%, they can
every 90 or 20 days (depending if tra is buying) go out and do
spontaneous larger volume buying which will raise the price of the
stock considerably. To add fuel to the fire there will be less
shares out there with less sellers so the price rises fast.

2)If tra deliberately caused the price to go down thru press releases
etc. there will be lawsuits in which tra will lose a lot more than
the difference they will gain on the stock price.

3) The strength of similar businesses (tra included) will support the
evidence in court vs tra.

4) It is in tra's interest to see that tnh is strong even in the
meantime of their pursuing in buying the shares, since tra gets the
divedend of $5-7 per share for 12 mil. shares at the least totaling
over $60 mil. close to $1 in tra earnings per share per year. It is
not in their interest to see their shares decline in value or
earnings.

5) It is very hard to short these shares since there are only 6 mil.
in the float. Tra cannot short or sell shares, since this would be
illegal. Others have no interest in doing so. Besides it is very
dangerous and costly to short these shares since A) they can rise
in price rapidly from here. b) the shorter has to pay the divedends
or $5-7 per year. which almost disallows the shorting.

All in all I see very little risk at the $33 price and divedends of
$5-7 or 15-18% per year is defininely worth any minor risks. The
reward risk factor definitely is in favor of the reward.

As for the number of shares in the float, I don't know if your
12 mil. is an outdated figure or whatever, but the company told me
friday that they own 65% (as of fri). which still has them 1.8 mil.
shares or 1/3 of the 6 mil. in the float, away from the 75% mark. As
to how rapid tra is buying this can be verified thru 13d filings and
I have seen none lately.

To me these shares are worth beyond $50. Analysts are predicting $5
in net earning for at least the next 2 years. Should any decline in
gasoline or increase in grain prices or the expansion and growth of
tnh occur the revenues, earnings, and tnh stock price explodes to
unamaginable porportions.

Hope to keep you informed as I see more info
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