KFL - discount to diluted NAV

[Toddy]

Final exercise date for KFL warrants is looming (31/03). I suppose it would benefit existing shareholders somewhat if large numbers of warrants lapsed, which would seem a real possibility in the current market. And anything else which helped to drive the SP down towards $1 would also be helpful. Hmmmm.

It would help non KFL share holders if the warrants were exercised. The cash from the warrants would help support other NZ shares as KFL purchased more on market.

But then again, it would be unlikely that they would buy more RAK, PPL etc as they already have more than enough exposure to the obvious risks of buying into young companys.

[COLIN]

Not a good time for holding a portfolio of small-cap growth stocks with high P/Es.
And another thing: A bear market highlights the inequities of having high performance fees as part of the remuneration for fund managers; in years of gross underperformance has anyone heard of any manager who has refunded even a small percentage of those fees?!
I was one of Carmel's devotees for quite a while but I have lost the faith in recent months.

DISC: Sold BRM and BRMWA shortly after the float as couldn't see justification for premium, didn't buy into the Marlin float as couldn't see how they could succeed in finding superior value in such a well-worked and vast sea, but unfortunately held onto my KFL's.

[chrisw]

Long time lurker, first time poster...

Talking to a broker at ASB Securities yesterday and as we were jointly commiserating over the performance of KFL and KFLWA (brought those turkeys last Nov @ 30 cents ), he mentioned KFL will release more information on Warren's departure this week. Better be good is all that I can say!

Cheers, Chris W.

[COLIN]

Chris - let me be the first to welcome you on board. I am sure you will find it more rewarding to be an active contributor - makes one think a bit more about issues. (That is, "more rewarding" than KFL warrants!)

[Toddy]

The gloves are well and truely on.

Rift at the top of Fisher Funds?
By GARETH VAUGHAN - The Dominion Post | Wednesday, 20 February 2008

An apparent bust-up between high-profile fund manager Carmel Fisher and her right-hand man, Warren Couillault, comes against a backdrop of a changing fund management sector.


Mr Couillault, Fisher Funds Management's chief investment officer and 27 per cent shareholder, stepped down as a director on Friday but remains an employee.

The move followed managing director Ms Fisher telling sharebrokers on Thursday night that Mr Couillault no longer had authority to trade shares on behalf of Fisher Funds.

Yesterday Ms Fisher said she could not confirm suggestions she would buy Mr Couillault's stake in the business. She said it was Mr Couillault's decision to stand down as a director, which he had done for personal reasons.

Removing his right to trade was a routine temporary suspension made whenever there was a change in the firm's investment team, Ms Fisher said. She hoped to be able to comment fully within a few days once a few issues were worked through with Mr Couillault.

"It's not a case of there being any wrongdoing or anything sinister in any way." Suggestions of a falling out between the two were people filling in the information void with their own assumptions, she said. "We're looking forward to being able to fill the information void ourselves with some facts."

Mr Couillault had been in Fisher Funds' Takapuna office both on Monday and again yesterday morning.

Mr Couillault said yesterday he was unable to comment for the time being.

Ms Fisher started Fisher Funds from her home in Auckland's Devonport suburb in 1998 with $17 million to manage on behalf of insurer Sovereign. Today Fisher Funds manages about $1 billion for more than 20,000 investors.

Fisher Funds, which Mr Couillault joined in June 2002, has also successfully listed three investment companies on the sharemarket - Marlin Global, Barramundi and Kingfish. Renowned for taking big stakes in growth companies and being a long-term shareholder, Fisher Funds has, like most fund managers, been hit by this year's market downturn.

[Steve]

She hoped to be able to comment fully within a few days once a few issues were worked through with Mr Couillault.
...
Mr Couillault said yesterday he was unable to comment for the time being.

I gather that he won't be an employee for much longer...

[COLIN]

Holders of KFL head shares will be hoping that not too many warrant holders actually take up their entitlements, thus minimising the dilutionary effects. (Diluted NAV of $1-24 versus undiluted $1-41). In today's conditions, and with the head shares at just over a dollar, I don't think many will.
However, I have noted that the shrewd Frank Pearson has been buying up SAMWA, even though the SAM price is well below $1. I guess the reason for doing that is that he would not be able to purchase significant quantities of the heads without pushing the price up over $1.

Back to KFL: What will Carmel do with the extra funds that do arrive from those warrant holders who exercise their rights? She could leave it in cash meantime, or she could buy more PPL RAK etc and help staunch the flow of blood from those stocks.

[winner69]

Carmel would want as many to take their rights up .... more management fees eh!!!!


... and Treetops would ay where else can you buy $1.21 for a buck

[Toddy]

Carmel would want as many to take their rights up .... more management fees eh!!!!


... and Treetops would ay where else can you buy $1.21 for a buck

Please, please take up all of your rights.

We need more Fishers to keep on pumping cash into the NZX.

[manxman]

With the share price so close to the exercise price of the warrants, someone had to make a decision on whether to keep on buyng back warrants. Most of them will fall off the tree anyway, so buying them back is just giving away petfood to those who are deserting the sinking ship.
This decision was taken about the time Warren decided to spend more time with his cat. It was obviously a board level decision because suspending a board authorized buyback is a board decision.
Subsequent happenings on Wall Street, and in our marketplace, have justified the decision to suspend warrant buybacks but at the time it was a close call.
The climate is obviously wrong for the warrants, which means very little dilution, and maybe - just maybe - a repricing of the head shares. 20% discount on NTA would be a big improvement.

Mx (Disc - No longer a holder, being treated for burns.)