shanghai listing eyed, page-10

Rockford,

The $20 I mentioned is equivalent to $200 in old terms. The $20 price expectation was a possible scenario from the same broker who is calling a short squeeze in FMG right now. The $20 price target is after the 10 for 1 split.

I mentioned there is an oversupply in steel and hence it will ultimately lead to pressure on iron ore pricing. We have a differing view here, hence our different stance on copmanies like FMG.

On an earnings basis, FMG has cost pressures, lower prices, a higher AUD$ and possible downgrade on production levels. (look at latest quarterly). I judge a company by its earnings capacity, which tells me FMG will have margins under pressure for longer.

FMG has to fund expansion through potential debt facilities from Hunan and not through cashflows as initially anticipated.

Happy Investing.