Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: Doug Striebel who wrote (6519)	2/2/1999 12:04:00 PM
From: TRIIBoy	Read Replies (1) of 18998

My current update is that if you can find shares it is a better short than ever before. Unless Dad and Junior somehow pony up $30 to $50 million I find it hard to beleive that they will survive. The only problem is that they post their next results by March 31. And that will only tell us how things were on December 31. The key is that the Real has depreciated over 40% since the beginning of the year. That means that the company is sitting on about $20 million in FX losses, not to mention the huge A/R the company is liable for. If you assume a conservative 10% loss ratio on this A/R you are talking about another $13 million. Then add in the prospect of lower sales because of a weaker economy and costs being higher, and the company will need about $50 million. Also remember that this company trades weird because so many shares are shorted. Do not panic and cover. This company is a zero.

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