Who really knows... their shares would have been less diluted...

Who really knows... their shares would have been less diluted (Diluted approx. 6% if memory serves me correctly). Yet their balance sheet would not have looked as heathy 'cash wise'. Naturally the concern was that the Global crisis was to continue longer. Plus they needed to keep their lenders happy, they did not wish to sell down too many assets in the worst commodity period in recent years.

Rio is priced down in comparision to BHP only because BHP are in a incredible cashed up state. BHP is betting on the Global crisis to continue to some degree for sometime to come. You will notice when commodities go up, then RIO steps up at a great % amount than BHP. When down then it steps down greater than BHP. Also past 'sins' in purchasing aliminum assets are priced into the RIO story.

I believe they shall go very close to making $5 per share in 09. At a PE=15 then that is a fair market value price of $75. $75 is my target for this year. If it heads over this without the commodity story up by more than 10-15% of prices now...Then it will be starting to be overpriced IMO.

Let us not forget that RIO made nearly $10 per share (In their PEAK) 2 years ago, yet the shares where not as diluted as now.

If you are a believer in the long term resources story and commodities will continue to rise. Then select RIO...

If believe in more in a 'L' shaped recovery or dips for buying opportunity for BHP, yet believe in the resources sector then BHP is your best bet.

In 6 months RIO can be up as much as double or 50% down. Whilst BHP could be a third up or down. Who really knows... crystal ball stuff.

My guess is without the Cap Raising then they would have not gone through with recent purchases, yet been able to keep lenders at bay. As the economy improved, it would have not been of interest for anyone to have a fire sale. They would have held on to most current assets and would have been priced below todays price by 5-10%. As their current purchasers and last quarter results has boosted the shares near 10% better in recent weeks, relative to BHP.