Freeport-McMoRan (FCX)

[eddy2]

Well not all of you agreed with Teddy and that’s a good thing. Let’s look at other possible assumptions of what the numbers could represent.

One suggestion is if you take the administration fees and subtract the depreciation the negative portion will be the share holders deficit while borrowing from the capital surplus equity for the balance. This in then creates a share holder debt equivalent to the deficit amount owing.

This all on top of the tax that is owed indicated by the treasury stock and the underlying outstanding shares held to secure the debt.

A deficit does not require collateral while debt does. Look up the difference between a share holders deficit and public debt to the government.

Another issue that was brought up is enterprise value. We’re not referring to the Star Ships Enterprise in the television serious but the entire production.

Let’s say the production required capital to replace the Star Ship Enterprise. The company has no debt and has a production company value of a $100 dollars in Bit coins a view years for argument sake down the road. The new ship will be $10 worth of Bit Coins. There is also a twenty percent tax on the purchase of the ship “ $20 “. The tax portion of the sale is then sold to the public along with 50% of the ships value. This is a receivable as good will from the public sale of the ship underwritten by the lender hired.

In other words what is not sold will be taken on by the underwriter.

We know that the company can depreciate 10% of the ships remaining value every year. The return on equity relative to the depreciation will be short. This is known as shorting the stock.

The remaining fifty percent value of the ship purchased is used as collateral. It has been discussed that collateral should have a risk value attached to it. That risk value that is owed also has a tax implication to the share holders who put up the collateral.

The tax is a future charge offset by current depreciation expenses that is yet to be realized because of the linear requirement on the capital charges on the collateral relative to the parabolic charges the international accounting standards allow.

You can now see another problem coming forth in the numbers if the capital charges on the collateral charged to the company could not add the extra required support due too the off balance depreciation charges too the depreciation and resulting asset value figure.

We will leave it there today too allow every one to think about the delema that has been brought to everyone’s attention. There is a value that is hidden in the outstanding share value that is critical in accessing if the company as a whole is solvent or not.