Freeport McMoran (FCX) Message Board

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Gold/Mining/Energy : Freeport McMoran (FCX)

FCX 39.42

-4.3%

Nov 4 3:59 PM EST

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To: Ron who wrote (1)	12/30/1998 4:50:00 PM
From: Potato Farmer	Read Replies (1) of 141

This stock earns half its living from copper (which sucks right now) and half from gold (which is pretty bad too). Things are bad enough that the common dividends are suspended indefinitely. No news yet on the preferred dividends but the market is discounting major problems. The preferred shares (which I own, FCX_pc) are tied closely to gold prices, but trade at a major discount. The discount is growing due to unrest in Indonesia and the possibility of suspension of preferred dividends. I'm holding for now (I don't need the tax loss this year). The way the pref. shares work is that they pay a fraction of gold's price each quarter (about .082% for FCX_pc) until they mature in 2003, at which time you get the cash equivalent of 1/10 oz. gold per share. That gives a theoretical value of about $28 per share, and an actual price well under half that, so you can see the market senses significant risk here. pf

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