Note F of the earnings report.
Looking at the deal made at the time it probably didn't seem too bad. Mr. Fernandez-Moris at that time owned 20,000,000 shares,the outstanding shares were about 60,000,000, 22,000,000 more shares would have made 82 million outstanding with the old man owning 42 million. The family by far had input the most real money into this company and has continued in that practice.
Now, somehow, he only owns 15 million and the number of shares has expanded to 85 million. now you would have to add 56 million, giving us 141 million shares with the old man owning 71 million.
Obviously, with this clause involved, the effect of adding additional shares has been magnified. How much? Let me go through the land deal numbers using 141 million shares.
I expect the company to clear $60 million on the deal. Add $38 million that the remaining land in Brazil and Peru( 251,000 acres, 392 sq, miles, a square 19.8 miles on a side!) should be worth, and $10 million for the sawmill, inventory, and other assets and we see the company's assets at $ 108 million. Using 141 million shares. $.76 BOOK VALUE, $.42 OF IT CASH.
Large difference, It becomes imperative that they follow through on their plan to buy back shares, because this will be magnified also.
Dave |
