on its way again , page-9

The prevailing share price is irrelevant to some degree, indeed its relevance to fair value is little more than an elastic connection. Uranium companies are valued for their in ground assets, as we saw with the UrAsia bidding in Kazakhstan last year, also with Areva's tout at SMM. This methodology, when applied to Paladin, amounts to about $10.50 per share, and does not include anything but their in ground assets.

No doubt if a predator were to make a tilt at PDN they would make a first try based on an appealing premium to the prevailing share price for say, the last three months, which for them, would happily drag in a number of witless sellers. However, the company, Paladin, would then take the trouble to inform shareholders of how it is done in the uranium world, indicating asset values alone grossly undervalue the company.

Needless to say, longer term investors already know these things, where fair value would probably fall somewhere between $15 and $20. That is, if the company were amenable to a takeover. If not, then the local stock market would be in for a lesson on how uranium producers are valued, and in the process, some investors would gain great wealth.

We are, after all, speaking of the value of the company, not the share price. The share at the moment is merely a product of market sentiment, nothing more. However when it comes to one business trying to buy another, sentiment is rapidly discarded in favour of longer term commercial realities.

Oddly enough, none of this will sink into the thinking of stock price watchers.