In what will be my last post on this thread and the last time I even look at the ALZ thread.....
The lower reconstructed share price is what I was referring to when I said there were other issues regarding reconstructions that impacted negatively on shareholders.
In my experience both as an investor/trader and in my previous line of work, in which I dealt with shares on a daily basis for years, I have seen plenty of investors get burnt and very few investors end up as winners following reconstructions as prices post reconstruction often don't reflect the value of the company prior to the shares being reconstructed and nor do the distributions. As the price starts to lag so will the distributions, and the problems pre-reconstruction are still there post-reconstruction. If management think that reconstructions are a panacea and all they need to do is do a reconstruction and everything will suddenly become rosy, they have another thing coming.
I view reconstructions as artifical cures and bandaids that do nothing other than paper over the cracks to cover up the real reasons why a stock is trading at depressed prices and no matter how high the price rises immediately after a reconstruction it'll start heading south again until the underlying problems and causes are dealt with (the GFC is just one and albeit big one but not the sole cause).
Off the top of my head I can name CXC,PIH, and more recently MSCDC (MSC) who have all had reconstructions, PIH on a massive 1:15,000, and even that didn't stop the share price further declining sharply since it relisted whilst CXC is down $3.70 from what it should have been worth immediately post reconstruction to what it is trading at now. There have been plenty of others but I just wanted to illustrate the point that it is anything but a given to think that ALZ will be trading at the equivalent of its current share price yet alone a better value post reconstruction whilst you know that I have my doubts about future distributions being paid out at 20.5c or more.
A truly healthy and strong company with good management would be able to do what is required to right the ship, trade their way back to health and they would be able to resurrect the share price of their company without screwing their shareholders in the process.
Still maybe selling out was for the best in my case because I was able to pick up six of the most exciting stocks on the ASX which all have enormous potential and should they take off and should ALZ prove itself over the next few years post reconstruction I might be able to reinvest in it along with first time investments in the big boys in the REIT sector,WDC and SGP, something I couldn't do if I had continued to hold ALZ at the present time.
Good Luck to all holders.....
ALZ Price at posting:
$2.28 Sentiment: None Disclosure: Not Held
