here is a post buy swap from another site,
a very valued poster and a worth while read
might just chip in a couple of cents worth here. Lawrence has raised a good point.
Without a doubt, the future of both Centro entities carry a level of uncertainty and remain a very, very high risk. Everyone here knows, or should know, that there is a chance they could lose all of their money and if they are on leveraged instruments like CFDs, substantially more than their money.
Some people might expect a 'but...' at this point, unfortunately one is not coming.
When looking at Centro there are some pointers to a dark future and some pointers to a light future.
On the light side, there is still $2.4bn of equity on the balance sheet ($2.82 per share), an NTA of $1.31, there seems to be strong interest in asset sales, we have a capable management team and what appears to be good income from existing assets.
On the dark side, Centro is grossly overleveraged due to the US acquistions, we have a softening global economy especially in the US where Centro has 2/3 of their assets, severe reputational damage, the inability to take out new hedge positions, litigation risk and falling asset values.
At the end of the day, in the absence of any really hard information from the company, we are all weighing up the relative strengths of light and dark and allocating capital accordingly.
One would have trouble denying there is a positive bias in the CNP HC forum, perhaps overly so given the risks involved.
As far as my personal opinion is concerned:
I am often sceptical of the motives of.. well everyone really.. but especially people who have a vested interest in selling their story. To this end, I pay little attention to business articles written in newspapers, unless they are written in a way that allows me to check their information. To date, the ability to do this is sadly lacking. We see many articles, but they often refer to unnamed people close to the business or unnamed analysts.
I do take notice of analysts who have credibility and back their research up with facts; not because I am prepared to take their opinion on face value but because I use their fact-based arguments to check or enhance my own. I have yet to see a credible analyst come out an put their name to the statement "Centro is definitely going to go bust, because....". Believe me, if someone like Rob Stanton from JP Morgan or Andrew Rosivach from Credit Suisse did this, I would be on the phone quicker than.. well, a very quick thing.. to find out why and adjust my own thinking if it had merit.
To be fair, I have not seen an analyst put their name to "Centro is definitely going to survive because..." I've seen plenty of analysts slap a 'sell' recommendation (usually backed up with a 'because') and a few like Macquarie who have said, in essence, they really don't know what the company is worth (hence the '0-50c' earlier in the year which I think was recently changed to a '50c'). Has anyone actually seen fact-based research which suggests the company is doomed? Please post it here if you have.
As far as the banks are concerned, they may well be looking after their own interests by allowing Centro to continue to trade to pay out the debts. In fact, I'd say they definitely are.
The lenders have made provisions for loss, but I have not seen any of them actually book a loss as yet. If you know of one, please let me know. They will want to do everything they can to make sure this doesn't happen so the provisions can be written back to P&L in the future.
The fact that lenders have allowed the company to continue to run the assets is a big pointer to the future in my opinion. The banks could easily of moved an administrator in to run the business and achieve the same outcome, but after 5 1/2 months they haven't and they don't look likely to do so either. Centro outlined a plan day 1 and they have stuck to it all the way through.
One final point to note is a subtle but significant one...
We have a board of independent directors who are bound by very specific duties (to shareholders and in times of trouble creditors as well) under the corporations act. They are still in one piece and we've not seen anyone bail during the crisis (unlike basket case casualties like AFG or MFS). This is not some tin-pot little Pty Ltd company we are dealing with here. Both CNP and CER are high-profile distressed businesses part of the ASX-100 (CNP) and ASX-200 (CNP, CER) indices. If you think ASIC, ASX and every other relevant regulatory body hasn't been deeply probing into CNP and CER affairs and accounts in the last 5 months, you are probably mistaken. Despite this we have seen no director resignations, no mention of insolvent trading, no public action against the company or directors from ASIC, the ASX or any other regulator. Even the class actions are based on misleading conduct not claims of insolvency.
So, at the end of the day I genuinely hope you can say 'I have / haven't bought xxx shares of CNP because..." and list you reasons. Hopefully none of them are not based solely on what you have read on HC.