Did I say I didn't ? That still isn't the issue... as doing that still doesn't begin to address the issue in equity. The issue, as a holder of the company selling, or that is considering selling, some of its assets, is the nature of the step change in realizable value that occurs with obvious and dramatic underpricing of assets relative to value...
That is... that value lost is a value that isn't recoverable...
Even if what I did was take the proceeds from that forced sale and rotate them into shares of the acquiring company... I'd still end up owning a lot smaller portion of the same pile of assets than I had owned before... as an obvious and inherent element of dilution occurs.
You'd have the same issue here... even more so.
If Philex forces a buyout of FECOF at $0.25 or $0.50 a share... I could then rotate the proceeds of that forced sale back into buying shares of Philex. That also might be a good investment idea... or not... but, never will I be able to recover that same POTENTIAL in the value I held in FECOF shares from buying Philex shares... I will inherently suffer a loss of investment leverage.
Whatever a FECOF share is priced at now, if the value in assets properly attributable to a FECOF share now proves out as being worth $5 or $15... or $50... in five or seven years... will I ever be able to recover that same bit of obvious investment leverage inherent in owning a FECOF share now... by converting my FECOF share holdings into a holding of Philex shares ?
Well... no... of course not. Philex, being a large company with a lot of shares outstanding, simply CAN'T duplicate the sort of investment performance that FECOF could generate... from developing the same set of assets.
Maybe I could do better by converting FECOF holding into Forum shares trading on the AIM... ? If FECOF actually does end up getting taken out of its Forum holding... I wonder how long it would be before the rest of Forum would be gobbled up too ?
I'd probably be better off, still, going for a holding of Forum shares rather than Philex shares... maybe be able to harvest another quick pop to a transaction price... ?
I still don't think it is obviously or necessarily in Philex's best interest to bring Forum and FECOF in as wholly owned Philex subs... rather than to use them in other ways.
I guess if I were Philex, and I were raking it in big time right now the way they are... I'd probably not mind using some of that $ while solidifying my ownership in things I wanted, but would likely be a lot more interested in expanding my ownership in things other than those things that I already own or control...
I'd probably be more interested in protecting and leveraging the value being created as it is harvested than I would be excited about the opportunity for paying taxes on it...
I'd probably continue to think that broader diversification is a good idea... while favoring diversification into areas with a higher probability of having a larger and continuing legacy of respect for my ownership rights, as a matter of law, and as a matter of the culture, rather than only as a matter of political privilege... which is frequently and notoriously fickle. (Maybe, ask Mubarak about that, this week ?)
I think Philex (or their subs) could easily benefit from some effort in leveraging an offer of participation in some of the projects they have control over now... into greater access to projects others have... that might be a benefit for them...
I think the recent opening of new rounds of leasing activity in the PI is probably a thing that is being vastly under-appreciated in the discussion, here...
I think the gold potential in the Lascogan project is similarly under-appreciated... and that Lascogan might have far more to do with the recent interest in acquisition of FECOF shares than the Forum holding does.
FWIW, my own interest in acquiring FECOf shares was made a done deal more by what I dug up re the Lascogan project... than it was by the more easily accessed stuff about FECOF's Forum holding, and Forum's interest in SC72...
I've not looked at my own notes on that stuff in a while... but, it looked to me back then like FECOF had MORE value in the gold than they did in holding Forum and the oil interest, back then... and that was BEFORE gold went on the tear it has for the last year and more...
Enough for today...
See ya'll tomorrow...
.JPG)
.JPG)
