Mark, always happy to have by biases tested! I agree it would likely have a significant effect on the SP if the wharf doesnt go ahead, but giving the company the benefit of the doubt, and assuming they are not outright lying, they claim profit would be cut by about 35% if they barged the timber out. On that basis a valuation of around the $2 mark is not unreasonable.
I take your point that if they are not lying about the impact, then why not barge it out now and get some cash flow? As you say, no need for CRs diluting our holdings then!
I still think its an assymetric risk - no wharf at all is extremely unlikely IMO, even if it halved the SP in the short term, if the planned wharf is built on time then the value is multiples of the current share price.
The thing that I have changed my mind on is the trustworthyness of management and their capital management skills - that does effect the price I am prepared to pay and the size of the postition I am comfortable with, but I wont be getting out completely.
KPT Price at posting:
$2.30 Sentiment: Hold Disclosure: Held
