CLW dropping, page-14

However there is this elephant in the room, and this is why maybe the market is worried:


Now focus on investment properties $3,481m against debt of $2,054m.
That's debt to equity of nearly 60%!!!!

Hang on many will say, that doesn't account for equity accounted investments of $2,593m

So now we go B2 in the annual financials (page 30):


Cheeky buggers, whilst its true they have a net value of $2,593, there is more debt siloed within the equity accounted investments!!!
So those equity accounted investments are not debt free they also have debt inside the investment vehicles (although it looks reasonable at only 20% and should be low risk given approx 20% gearing).

I'm thinking that if things go to pot, CLW can't just exit those equity accounted investments to raise immediate cash, these are unlisted investments.

So that debt on the CLW balance sheet of $2054 against an unrealistic (nobody believes) book value of $3481m of properties held directly by CLW, is primarily why the market is nervous.
And with potential higher interest rates for longer, is why the market is shooting first (ie exit) and ask questions later. First man out the door in a fire scenario.

Conclusion:
There is opportunity, but there is also risk. I would not be putting all my capital into this. But as share price falls, for me it's worth a punt a few % of my capital. I will dollar average into the position, but I will have a macro cap limit against the total value of the portfolio. This macro cap limit applies regardless of how far the share price falls.