I'm a bit confused by your figures for their holding of Metlifecare - how do you work that out? I have them with a 22% interest in RVG which in turn has a 39% interest in MET.NZ (after the recent capital raising MET did).
You have to remember that FKP are also sitting on over $600m of debt so you need more than just the two holdings you've mentioned before you can start looking at positive equity. In fairness they have this - an extra $1.3b of equity on top of the $600m+ in debt as at 31/12/12.
Surely the NTA of nearly $4 (even with significant further write downs) has to put a stop to the share price drop eventually. Given they converted $100m+ in property to cash at near enough to book value in February and raised $200m in cash at $1.40/share late last year the current price is a screaming bargain. I don't think they are a great business by any means but all they need to do is sell down some assets at 80% or more of book value and focus on some capital management with the proceeds. With that they can destroy the shorters.
Frustrating that the company isn't doing more already though to address the fall. Why don't they be proactive and give an update rather than have to wait for the ASX. Why not announce they are going to put in $20m or so from their most recent asset sales to commence a short term buy back. Their gearing levels aren't too bad at the moment and what better investment could they possibly have at the moment than buying back their own stock at up to 40% of NTA ($1.60). Certainly a better outcome than having that $20m or even $50m paying down debt that is only costing them 6% or so and isn't necessary to satisfy any debt covenants.
Anyway - we might have to wait until the August results but surely even the most incompetent management can use the $4/share NTA and comfortable gearing to catch out the shorters and increase NTA/share at the same time. One well placed announcement is all it will take and, as has been pointed out, with low liquidity there will be no way out for those who have gone in hard to short this thing
FKP Price at posting:
$1.00 Sentiment: ST Buy Disclosure: Held
