vrlpa - am i right?, page-19

re: vrlpa - am i right?-wrongway If I remember correctly, right before the dividend cut announcement was made, VRL was trading for $1.77 and the pref at $1.45. A 32 cent spread. I also seem to remember that prior to this announcement that a 30 cent spread was the normal price differential...

If you look at a chart comparing the prices of the two issues, both moved down together after the cut until about the middle of June 2002.

From then the prefs fell much faster than the ordinary shares.

IMO the greater fall in the price of the prefs had to do with the continual comments from members of the VRL BOD questioning the future payment of the dividend on the prefs. Today was a good example of how the prefs still lag.

There is (was) no question that the share prices of VRL and VRLPA do not reflect the underlying assets of the company. The problem is with the management of the company.

After the cut in the dividend and the numerous articles about the company and what the directors said, the question remains:

Do you trust your money to individuals that have acted in such a manner?

For me the answer is simple: NO.


The prefs are still vulnerble to the BOD (ie Kirby's) deciding that they will not pay a dividend on the prefs. Should that happen, the price will fall and never recover....

Also look at AEO ,another company where the VRL controls, due to its shareholding. The stock sells for about 60% of its NTA - about thesame as VRL did before the recent run.

A pretty poor endorsement by the market of the current BOD and the way they run the company.