At $1 share price company is on that PE of 2.......in a mini scoop here, I would suggest that, sure there is reason for concern from the company over that $200m plus due next month. They have cash to cover the payment.....but not enough for the six month dividend which is due shortly after.
So maybe a shotfall of $50 million for the dividend......big deal. Not enought to justify a loss of 70% or $2 billion in market cap......and certainly not in anyway justifing talk of the company being in trouble. It is just hard to get bridging finance at the moment.
The dream stock on the local bourse to own right now, prior to the gap reopen. Just like management at Coles and QANTAS in recent times......they have been trying to sell their business to deliver shareholder value for the last 6 months.
Company have talked about everthing from an IPO, to selling portions of the company off....for 6 months. FACT: almost closed a deal for $1.2 billion in late Novemeber. Now 2 would be buyer have again been flushed out. So why not just sell off a part of Stella now.....would serve to put a value on the company, just when the market has got things wrong.
Look for a 51% sale at about $1 billion.....would value the overall company at about $2.5 billion or $5 a share. However who knows what price it will gap...is it so bad to actually hold the stock more than one day, for it to deliver closer to fairer value, should the reopen price disappoint.
Investors should read company announcement and not the local press for their source of information.
MFS
mfs limited
