price slide, page-35

Graham

>[I believe you over estimate the importance of PPX to all 3 substantial shareholders - another few cents is now immaterial to them. I calculate MBA's price is $2.52 & Orbis is 0.694. Who cares?]

I am of the view that every cent counts to all investors.

>[then nothing happens with PE, PaperlinX is forced to sell off parts and the funds go to PXUPA]

Do not think this is correct. My understanding is that PPX can sell parts (other than the European bit) and use the proceeds to pay off the banks, improve its cash reserves or even buy PXU on market to reduce its longer term obligations. This have been discussed by others here.

>[as I submitted elsewhere, that is an OK punt for you, but there are no large natural buyers of PPX except PE. Why will things change at PaperlinX after 10 years, apart from "bets" and "wishful thinking"?]

If PE think they can turn it around there is no reason why Marchant or his replacement cannot. Desperation can be a powerful weapon.

>If PXUPA is worth $17 then PPX is worth zero.

The market current does not think so. I believe they are currently both wounded eagles. I agree in case of liquidation PXU rates higher than PPX but that is its only advantage.

You write in your blog "Equity may evaporate but debt is forever" If PPX is liquidated down the track and there are only sufficient funds to pay the banks then the obligations owing to PXU also evaporate.