David, they made it clear that they were selling 3/4 of the land. from the news release:
"Management states that the company has no intention of selling the company-owned timber producing property in the State of Amazonas in Brazil which accounts for 25% of its total land holdings. "
Total land holdings are 706,000 acres ( bigger than Rhode Island) so the are selling 528,000 acres. Is it +- 50,000 acres? could be, but we know pretty much from these statements. Do you have any other info?
The magic, in my mind, is that they are selling this in thirds. All they have to do is sell the first third and all the other land has a real value that we can use.
Of course the land deal is only worth 7-8 times the share price of this company at the present moment, not 30x.
Then again, should a profitable company that is expanding in diverse markets, shares sell at the amount of cash they have for each share? No, perhaps they should sell at a very conservative book value of 2x or 3x. Huh, that gets me to the land deal being worth 14x to 24x the present share price. I guess 30x isn't out of the ball park after all!!
Now let's see, what is 30 x $.14?
The market makers are getting plenty of stock, they make sure to push this down to the lowest price every day. When that first third of land sells, they are really going to cash in.
Assets of this company, even valued at a conservative original cost of the land, are $.47/share according to TF's latest figures, if I remember correctly. We are selling at a PE of ~14 on twelve month trailing earnings, and the third quarter last year was ~nill .001, so this quarters earnings will make a drastic change in the PE if they are more. When the land deal goes through, the market makers will jump this up to a much higher price, and people that are not on board will not gain from it.
One thing is for sure in my mind, if they sell the first THIRD of the land and have $25 million in hand and the share prices are under $.50
a share, they might as well buy up the outstanding shares that they don't own. Sell the other 2/3 of land and be extremely rich, AND STILL HAVE THE SAME COMPANY THAT THEY STARTED WITH, minus some land that they don't use anyway.
That's what I'd do. FEAR and PANIC anyone? NOT ME!
Dave |
