abc learning not looking good, page-3

Folks,

Though I HOPE that it is just a market over-reaction, the recent actions of some directors who apprear to have dumped shares SEEMS to indicate which way they (as individuals) believe that the share price is heading.

Learning from history is important. TOO rapid an expansion fuelled by a supply line of debt is never a good thing when making an incursion into new territory.

Witness George Herscu of Melbourne in the late 1980s who expended into US shopping malls - carried aloft on a mountain of debt before tumbling down when the mountain collapsed upon him.

Let me quote:
"George Herscu, the Australian real estate magnate virtually unknown here a few months ago, has taken American retailing by storm with his rapid-fire acquisitions and his plans to build giant-size malls around the country.

"We are fast, we are quick,' said Herscu, the 59-year-old executive chairman of Hooker Corp., Ltd., a publicly held Australian conglomerate controlled by Herscu. "When you are in mergers and acquisitions, you've got to grab it and you've got to run."

And on a different lesson of history, what are Collateralised Debt Obligations except junk bonds (reminiscent of Michael Miliken) as applied to real estate?

Getting back to ABC Learning, it is my hope that investors will recover all losses as it is clear that the business model is robust - it's just what appears to be misjudgement on the timing and extent of the expansion.

(Sir) Lunchalot
Scoffer Extraordinaire
Disclosure: Lunchalot does not currently hold ABC shares and thus his opinion comes cheap, so beware. If the sp gets down to a level that he finds affordable and attractive he may purchase ABC shares.