The Rising Influence of Rising Affluence

[biotech_researcher]

jbog, you may be right. By my math, they paid $1,734 per acre last year. According to the (gulp) SA article yesterday, "Plum Creek's latest 10-K filing said the company has 177,094,071 shares outstanding. Dividing shares outstanding by 6.8 million, the number of acres it owns, we get 26. The means owning 26 shares of Plum Creek's stock is equivalent to owning one acre of land, excluding other asset and debt considerations. At recent prices, that would be an investment of $1,094.

Average pricing for an acre of timberland peaked in 2007 at about $1,800 -- prices during the low points of the 1990s and 2000s were around $600 per acre."

There are an immense number of variables at work here, but they may have overpaid for that purchase of 501,000 acres, but in the scheme of things, that 501K of acres verses 6.8 million acres shouldn't have matter that much for the shares to fall so hard. I expect there is something else at work here.. (i.e., deflation). I think the six months will tell the story, and PCL is a leading indicator for deflation.

http://www.bloomberg.com/news/2013-10-28/plum-creek-to-buy-meadwestvaco-lands-for-1-09-billion.html