MFS - MFS Limited

[Dukey]

Announcement last night...Non-exec director Michael Hiscock has resigned.... reluctantly... interesting...
Anyone got the inside scoop on that??

 

[chicken8]

possibly because he had to sell 500,000 shares in the company due to a margin call.

either way MFS hasn't opened yet. so perhaps this wasn't the news that initially put MFS into a halt

 

[UPKA]

I think Michael's resignation got to do with the planned restructuring of the company. Or it may be because of other personal commitments, he's director for 2 other companies as far as I know... not something we'd stress about as he only holds a rather lightweight position with MFS.

 

[The Mint Man]

Announcement last night...Non-exec director Michael Hiscock has resigned.... reluctantly... interesting...
Anyone got the inside scoop on that??

possibly because he had to sell 500,000 shares in the company due to a margin call.

either way MFS hasn't opened yet. so perhaps this wasn't the news that initially put MFS into a halt

I think Michael's resignation got to do with the planned restructuring of the company. Or it may be because of other personal commitments, he's director for 2 other companies as far as I know... not something we'd stress about as he only holds a rather lightweight position with MFS.

Ummm.... is it just me or are we talking about 4-5 day old news? This happened (the sale of 500000 shares) way before the trading halt. I thought last nights Ann was merely a formality?
Anyway, I don't think this has anything to do with the trading halt.

 

[rgdk]

Further to Mint Man's comments regarding irresponsible scaremongering in the media the same tack was taken in The Age's reporting of the proposed merger b/n CIY and MFS in which they referred to MFS as "struggling", quoting their share price depreciation as evidence, not anything tangible in terms of their business performance. They also implied that the lack of the ability to divest Stella was a negative - in my view, the fact that they have kept it indicates that see long term value in travel and that they CHOSE not to sell it in the end. Certainly negative scaremongering is the flavour of the day for lightweight journalism.

And as no one as actually stated it yet, in the application for the trading halt MFS specifically stated that it was in relation to consideration of a possible structural separation of MFS FS and Stella. But I think the decision was also prudent given the panic selling that has been going on in the stock due to misinformation.

 

[Prospector]

And further to the margin calls resulting in a Director selling off a huge parcel; surely, as a Director of a Company, there should be legislation in place whereby Directors cannot use their company's shares as leverage for a margin loan - they should be kept separate, and if they can only afford to buy them on margin, they shouldn't be allowed to buy these shares at all?

Joe Blow (sorry JB) selling shares as a result of a margin call is one thing; a Director having to offload mega shares is a totally different one.

ASIC, where are you?

 

[The Mint Man]

Certainly negative scaremongering is the flavour of the day for lightweight journalism.

Yeh well said. I think we are going to see a bit more of this too. After all they need some headline news as there is no other 16 year olds throwing huge parties that they can pin to the headlines for 4 days straight probably means that the market is nearing its low, isn't that the way it normally works?

 

[chicken8]

can someone please explain what is going on

why are we down 25% when we'll be getting shares in stella and MFS

and then the takeover will put MFS shares above $3 a share alone

i'm just trying to make sense of all this

 

[UPKA]

can someone please explain what is going on

why are we down 25% when we'll be getting shares in stella and MFS

and then the takeover will put MFS shares above $3 a share alone

i'm just trying to make sense of all this

http://www.goldcoast.com.au/article/2008/01/18/6896_gold-coast-business.html
this article might explain it a bit more, looks like hedge funds selling out, forcing the price down, i can see a lot of large accumulation going on. the current irrational price is only temporary.

 

[GreatPig]

the current irrational price is only temporary.

You're not wrong there. It's currently down about 64% and still appears to be falling.

The next Centro?

GP

 

[chicken8]

You're not wrong there. It's currently down about 64% and still appears to be falling.

The next Centro?

GP

but the thing is i need an explanation. this doesn't make any sense. at a market cap of $600mill and falling. they have $300mill in cash and $150mill a year income coming in

this equation just does not make sense

 

[The Mint Man]

Cant agree more with your comments. This to me seems like hedge funds short selling and creating panic, which they are doing a damn good job of. I think it would be odds on for a big bounce monday IMO

 

[rgdk]

I agree withe last few posts - there is nothing IN THE MARKET that could even remotely be contributing to the rout. Something someone else knows?

Or is it a snowball effect of hedge funds and margin calls? I am completelt dumbfounded... and much poorer than I was 2 hours ago!

 

[robert toms]

I tend to be a pessimist in these situations,but what has happened has surprised me....will City Pacific still stand by their original offer ? Looks good now!
Well ,there is no pulling the pin now....too late for that.

 

[GreatPig]

While the company appears to be called just MFS Limited now, it used to be called MFS Leveraged Investment Group.

Maybe that italicised part has something to do with it.

GP

 

[UPKA]

While the company appears to be called just MFS Limited now, it used to be called MFS Leveraged Investment Group.

Maybe that italicised part has something to do with it.

GP

yes the company may be built on debt, but as stated and confirmed over and over again, there's only $150m short term debt due, i dont understand what the issue is... like said, its hedge funds getting out, triggering a lot more stop losses and margin calls. THIS IS NO CENTRO... they dont own anything in US, plus most of their properties are hotels n resort, valued completely different to your average property fund...

 

[rgdk]

Actually, further to my last post, my only in market explanantion of the sell off is the market viewing the $550 million recapitalisation as an underhand admission of credit problems.

Almost 10% of the shares on issue traded in 2 hrs!

 

[chicken8]

MFS is in the ASX200. and last week there were quite a few buy recommendations from brokers on MFS

so alot of people would have went into MFS margined

and now everyone got called.

so im guessing the drop down to $2.50 was from hedge funds dumping

drop down to $1.50 was margin calls

and drop down to $1.03 was just fear

but the question is. where do we get back to from here?

 

[rgdk]

The following is off The Age website just now - looks like they reckon it is the evil four letter word too:

Shares in funds manager MFS have fallen more than 50 per cent this morning on concerns about the level of debt it is carrying.

Brokers said investors were also worried about the level of debt being carried by rival City Pacific Ltd, which has made an offer to buy MFS' financial services arm.

MFS announced today it would split the financial services and its Stella tourism businesses into two separately listed companies.

MFS said the spilt would allow both businesses to be "recapitalised to reduce indebtedness and to achieve capital structures that are appropriate for the different markets and capital requirements of these respective businesses."

Auststock Securities senior client adviser Michael Heffernan said the market had punished MFS for mentioning that the split would allow it to reduce its debt.

"Anyone that mentions debt to the market at the moment is setting themselves up for a hammering, and where there's smoke there's fire in this sort of situation," Mr Heffernan said.

"It might be irrational, but that's the way market is at the moment.

 

[sideshowbob]

im tempted to gamble

and put a good pile of cash in MFS today.????!
If there is a rebound this week... surely MFS is a good buy at $1.3.