Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Western Wind Energy Corp V.WND



TSXV:WND - Post by User

Post by agrossfarmon Dec 27, 2012 1:20pm
87 Views
Post# 20774758

get real, Reduce

get real, Reduce

1. FVR did a reverse split and lost a high percentage of its value after doing it, and most companies that reverse split lose value as a result.

2. The Market is just not interested in investing in companies that have continued cash needs to develop projects in renewables or even in minerals. They tend to approach fair value only when active operating power producers or miners buy them on the cheap. The developers are in the Minor leagues and get no respect in the Market, even with smart management doing their best. 

3. Project developers need to borrow money and if they have no income, the interest rates are usurious because they can't really afford to pay any interest without diluting the shareholders. Money is needed to develop the projects and you want the company to waste it on stock buybacks or dividends. Dream on.

4. From your reply about the NPV calculation, it appears that you don't really understand how to do one and are only parroting what you read somewhere. FYI, the results of the NPV depends upon the data that you use AND the assumptions that you use. You can't do a NPV without making assumptions. And you can't  evaluate how realistic a valuation is, unless you know the facts and the assumptions used. You can be sure that each bidder for the company will try to do one or more NPV calculations, perhaps with differing assumptions.

5. The value of the projects, their location, the tax benefits, and the discounts for projects at various stages of completion will differ depending upon who is studying it. That is why different potential buyers will make different bids. 

6. While we can try to estimate debt per share, tax benefits, and the value of projects in operation and at earlier stages, there is NO one right answer. With around 25 potential buyers looking at the company data, the best offer made can be assumed to be the very best offer we are going to get...unless Brookfield or someone not in the official process makes a higher bid at the last minute, because they judge the assets to be worth more than the offer they top. 

7. All that being said, we could get close to $4 (higher or lower), but it makes no logical sense for you to think you know the value when it is taking companies weeks and months to do due diligence so that they can decide what the company is worth to them. As investors, we buy and sell at Market prices and that is how the value is determined. The Rothschild process is designed to get the stock price to reflect the income-producing value of the assets so that we can get more money for our shares. 

<< Previous
Bullboard Posts
Next >>