TSX:TECK.A - Post by User
Comment by
BigNickon Apr 06, 2009 12:00pm
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Post# 15899537
RE: RE: Any thoughts on TCK today.
RE: RE: Any thoughts on TCK today.The 20% sale will do two things. First it will reduce Tecks long term NPV by anywhere from 1 to 3 BLN,
2Nd, it will immediately lock in a paper (earnings) loss of 1 to 2 BLN (2-4 per share), depending on its sale price.
This transaction will not be accretive too teck shareholders either short term or long, term, it represents value destruction beyond that which has already taken place due to the acquisition of FDG in the first place.
It would represent not just a violation of the gold rule of investing, but in fact the exact opposite - Buying at the absolute top of the cycle, and selling at the absolute bottom. this being most likely a 20-50 year cycle, and hence locking in permanently the value destruction, of the brutal proportions reflected in the share price action in the past 6 -9 months.