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Thread: Meridian Float

  1. #31
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    Quote Originally Posted by troyvdh View Post
    Big picture here...(I have folk who do not have a clue but do ask the question)...given what happened to MRP...and are consequently blah blah....me thinks its probably more good than bad....

    again ...I believe the share price is TOTALLY irrelavent....i.e. an asset worth $10....ask investors to buy 50 %....then 50 cents....ask blah for 20 % 20 cents...same deal...am I wrong here...surely this is 101 stuff....cheers

    please tell me if Im wrong

    You're not making your question clear, but I think I get the message. The share price is indeed irrelevant. It's just the value being sold divided by number of shares issued, which is simply a marketing decision of the issuer. e.g. they could offer twice the number of shares at 50 cents with a further 30 cents down the track. Or half the number at twice the price. Having said it's irrelevant, there's perhaps a psychological effect on the marketing. A little like selling a car for $9,999 rather than $10,005 might have. You may have observed companies at times splitting their shares, which simply means every holding doubles in number and therefore should halve in value. They do it to put more shares out and improve liquidity - so they say - but often a share split sees the shares go to a bit more than half the value. The moral of that story is 'There's naught so queer as folk!'

  2. #32
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    Quote Originally Posted by snapiti View Post
    100% correct the share price is irrelavent unless you dont know what you are doing.
    I was having dinner with some friends last night and they were thinking of purchasing some meridian shares because they were going to be $1 cheaper than what MRP listed for.
    Even the shareholders association guy on the news last night made it sound like it was cheaper than MRP because of the share price

  3. #33
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    Quote Originally Posted by CJ View Post
    Even the shareholders association guy on the news last night made it sound like it was cheaper than MRP because of the share price
    I heard Pam Corkery on radio last night scoffing at the share price with remarks like 'a dollar - is that all they can get for them?', as though a dollar meant a share is worthless. She simply has no concept of how share values are formed. To think she was an MP, voting on billion dollar decisions with public money is frightening.

  4. #34
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    Quote Originally Posted by fungus pudding View Post
    I heard Pam Corkery on radio last night scoffing at the share price with remarks like 'a dollar - is that all they can get for them?', as though a dollar meant a share is worthless. She simply has no concept of how share values are formed. To think she was an MP, voting on billion dollar decisions with public money is frightening.
    Unfortunately she is not alone.
    Very few MPs have any commercial sense,and even fewer have had any business experience.

  5. #35
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    Quote Originally Posted by peat View Post
    wow looks too good to be true.


    and it is.
    paying out 1.5 x earnings in dividend to provide that yield.
    The question is how long this dividend policy can last,MRP pay just over 100% earnings in dividend is more reality.

  6. #36
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    Quote Originally Posted by Master98 View Post
    The question is how long this dividend policy can last,MRP pay just over 100% earnings in dividend is more reality.
    profit includes non cash items - mainly depreciation. Maintenance is normally less than depn and they won't be build any new plants in a while so it's probably good for 10 years?

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    dear fungus....you indeed have a very good point...it is trully frightening....its my belief ..and has always been that ...the vast majority of NZ ers are quite financially illiterate....as I say to my mates....kiwis are fantastic/brilliant at working/making for the dollar.....but just cant keep the bloody stuff...keeping the stuff requires a different mind set/discipline quite honestly ...it drives me nuts at times ...cheers...

  8. #38
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    Quote Originally Posted by belgarion View Post
    Anyone crunched back to see if M has been skimping on maintenance to make the books look better (but will incur addition expenditures once the float is away)?
    still reading but they have just finished refurbing their two main hydro stations - pg34 (just a quote, no detail)

    Refer pg 86 for engineering report
    Last edited by CJ; 21-09-2013 at 09:58 PM.

  9. #39
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    Meridian revenues are more subject to weather dependency than its competitors.

    Hydrologic Inflows have improved over the last few weeks which will positively assist the IPO and initial market reaction. Conversely, it may well mean that the Meridian SP will kick off and stabilise over the next few months toward the top of what we may anticipate to be a long term (years) weather dependent trading range.

    http://www.electricityinfo.co.nz/com...Page.hydrology

    Iím still researching and havenít yet made a decision on Meridian just yet, but there may well be better entry points for Meridian during dryer events. The dividend play looks fine for those who chase income though and any cyclicality may not be an issue for some.

  10. #40
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    Quote Originally Posted by MAC View Post
    but there may well be better entry points for Meridian during dryer events.
    Depends what the second installment price is if you aren't subject to the cap.
    Free delivery worldwide with Book Depository http://www.bookdepository.co.uk

  11. #41
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    Fantastic assets;
    "You will never buy better!"
    Last edited by percy; 23-09-2013 at 12:09 PM.

  12. #42
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    Quote Originally Posted by percy View Post
    Fantastic assets;
    "You will never buy better."!
    The yeild looks very attractive on the capped price.
    Free delivery worldwide with Book Depository http://www.bookdepository.co.uk

  13. #43
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    A question is why do they claim big depreciations?.

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    Quote Originally Posted by Joshuatree View Post
    A question is why do they claim big depreciations?.
    The bulk of Meridian assets are large hydro's built by NZED between 1930 and 1985. During the early corporatisation phase 1993 through 1996 there was a lot of debate as to how best to value these assets and Meridian have been tweaking valuations ever since they inherited them.

    Basically, almost all of their assets, by value, are well over 25 years old but still depreciating heavily as large hydro's require very little on-going re-capitalisation over what could be a life span of over a century ?

  15. #45
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    They would have revalued them up as well so they maybe depreciating the revaluations.

    That is basically the Greens/Labours theory - you shouldn't be able to earn a return on the 'fake' revaluation.
    Free delivery worldwide with Book Depository http://www.bookdepository.co.uk

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