shorters providing opportunity?, page-11

Szaba,

I just feel its abit more. This time last year:

LNC: $2.79
Crude: $96
ASX 200: 4472

Today:
LNC: $0.60 (down 78%)
Crude: $90 (down 7%)
ASX 200: 4175 (down7%)

The poignant fact is that the institutions continue shorting LNC, even at the 60c mark. But that I think is that they’ve highlighted the problems and opportunity of the LNC business at the same time. There is a problem in the strategy of Clean Coal, and how that fits in with the overall business of LNC. And there is a problem in Peter Bond’s love affair with UCG-GTL at the expense of shareholder value creation.

Peter Bond has done well for LNC, we needed him during the growth phases of the business. But it’s time to get ruthless if he’s serious about shareholder creation.
He has an opportunity Float all three line of businesses as separately listed entities and applying a swim or sink methodology, what will hopefully come about is:

1) A drastic reduction in excess and idle corporate waste, management and technical fat (much more than he has done to date)

2) deliver an immediate dividend stream from the north American assets, where instead of large ‘unproductive’ man hours wasted on chasing deals (It is not something to be proud of in spending 1000 of man hours doing deals for the sake of doing deals)

3) Insulate us from any risk that the golden concord deal does not gestate

4) Unlocking and appreciation of coal and oil and gas assets

5) Institutional and market confidence that there is independence and an actual focus on shareholder value creation, that management is selected on performance

You need a strong board of directors to question the strategy of the founding CEO with 40% shareholding if you want to keep you board seat. But the main fact is that it's not too late, and immediate drastic actions is the only way to double shareholder value and beat the shorters at the same time, whilst allowing LNC to properly grow.