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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (12931)	8/11/2001 1:23:15 PM
From: Brendan W	Read Replies (1) \| Respond to of 78753

Article in today's Barrons describing the M&F Worldwide story. I find it interesting that when a investor with a virtuous reputation takes a stake (e.g., Buffett) it benefits him and the public, but when someone with a lesser reputation takes a stake with an eye to buying out the company, it benefits him and not the public. The public rationally discounts the company and perversely rewards the investor. This is prior to even considering any actual bad behavior (self-dealing, etc.) of that investor with respect to the company. My take on M&F is that absent Perelman and the Panavision deal the company is clearly worth worth more than 10x trailing eps of about a dollar or $10. I place my own minority discount of 95% on any Perelman controlled entity if the deal does go through which would make for maybe 25c per share. My quickie/worthless judgment on the suit (based solely on this article) is that plaintiffs should stand at least a 50 percent chance of a judgment/settlement that produces a $10 stock value. I have neither the background nor information to make a credible judgment. 50% of .25c plus 50% of $10 results in a value for me of $5.13. I place a 50% discount on that for my aggravation and investment return. So I will buy at $2.55 so long as the verdict is not in. This analysis assumes that the Preferred B stock has been retired (contrary to the appearance on Yahoo Insider). P.S. My only knowledge of Perelman is from this article and should not be relied upon.