The shares of those companies you refer to went down because they crapped out and failed/nearly failed. Single reason failure mostly.
BBI has gone down for 3 reasons:
1. The BBI and BEPPA securities have dragged each other down in a death spiral due to the increasingly dilutory nature of the prefs. $2 down to 3 cents, 90 cents down to 5 cents. 2. The GFC has rendered the BBI business model ineffective and no longer profitable. The market is pricing in the failure of BBI to the current share and notes prices. 3. The company is overgeared and needs to sell assets to stop if from failing.
To what extent each has contributed to this, well that is open for debate. But I can tell you now with certainty, if the BEPPA's did not exist, the BBI share price would be somewhere between 15-30 cents in my opinion, which is a significant discount to its NTA.
The key component of the NTA of the ords is the number of shares on issue. Due to the very subjective nature of just how many shares would be on issue in the event of both the SPARCS and the BEPPA's converting into shares at a very low share price, well the market in this situation assumes the worst and will not restore any value to the ords until there is more certainty about exactly how many shares in BBI will ultimately be on issue.
If you are holding BBI ords and BEPPA's, good luck to you all. I hope you have done your homework on exactly how many shares will be on issue. I think BEPPA's are totally oversold relative to BBI ords. BEPPA's have a fixed value of $1 and BBI ords do not have a fixed value as you do not know ultimately how many shares will be on issue and therefore you cannot peg down what your actual NTA is going to end up as being. How people can actually compare the price of BBI ords to BEPPA's, well it beats me. Just not apples vs apples.
BBI Price at posting:
8.4¢ Sentiment: None Disclosure: Held
